It was revealed on Wednesday that Travelzoo (NASDAQ:
), is seeking to sell itself. The internet company which provides
travel deals on flights, hotels, vacation packages and cruises,
has stated that it is going through a "quiet period", and it is
now in the process of looking for a financial advisor.
TZOO declined to comment when contacted by Benzinga, so it
appears that they weren't kidding when they referred to a quiet
period. Still, the market value of the company is a cool 336.1
million, so one would imagine that it would be an attractive
proposition for someone.
Following the news, TZOO shares shot up 24% to $26.12 in
premarket trading. That might sound like good news, but in fact
the company's shares have dropped over 70% since this time last
year, when seemingly every web-based company with a known name
was the subject of a massive media buzz after Groupon (NASDAQ:
) had announced that it was planning its initial public
Much like many other web-based companies, Travelzoo's income
comes from advertising revenue and partnerships. However,
consumers don't actually book their trips through TZOO and for
that reason it is facing increasingly intense competition from
rivals like Priceline.com (NASDAQ:
) and Expedia (NASDAQ:
). In terms of local deals, it is competing with Groupon (NASDAQ:
So who would be looking to buy TZOO? The obvious candidates
would be Amazon (NASDAQ:
) and Google (NASDAQ:
), though neither companies have made any noises in that
With 24 million subscribers in North America, Europe and
Asia-Pacific, the fact that Travelzoo does currently have a
depressed stock price should attract a few sharks. The company
has a built-in subscriber base, and it is growing 10 to 15% and,
with GRPN having so much success with getaway deals, it makes
sense for one of the bug guns to acquire Travelzoo.
It will be fascinating to see who eventually gets Travelzoo
but whoever it is will be getting a solid brand with a lot of
existing customers. With a big-money mega company behind it, the
sky would really be the limit.
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