In a report released today, eMarketer estimates that 16 million Americans will book travel from their mobile devices this year, increasing 33 percent from 12 million in 2011. Even more people — roughly 37.8 million — will use their phones to research travel this year.

It’s no wonder that big online travel agencies, like Priceline and Expedia, are quickly expanding into mobile. One common mobile strategy is to build an app that gives deep discounts to people who book a hotel room from their phone for the same night.

Travelers who may not have access to a computer are an obvious market for hotel information, flights, maps, reviews and other services.

EMarketer said despite mobile’s rapid growth, total spending on online travel is growing more slowly than overall online retail sales. This year, online travel spending is set to increase 11 percent to $120 billion in the U.S.

But clearly all the trends spell bad news for travel agents and physical travel agencies. EMarketer expects a majority of Internet users to research and book via the Web.

But there’s a third option emerging, where the actual teams and venues are offloading excess inventory, and instead of paying face value, customers can name their price — sort of like hotel rooms on Priceline.com.

ScoreBig.com, which launched in October 2010, is promising that winning bidders will end up getting tickets up to 60 percent off, and a minimum of 10 percent off.

“Forty percent of live event tickets go unsold nationwide,” said Peter Sinclair, the company’s VP of Marketing. “Even when they fill up the building, they are giving a lot of tickets away.”

Sinclair said this is a way for those venues or teams to move that inventory without degrading the brand. He declined to say who they work with in particular, but that the Los Angeles-based company works directly with teams in every league and ticket vendors, like TicketMob.

Today, the company is opening its site to anyone after having a long wait list. Additionally, it is launching an iPhone app called ScoreBig Daily, which offers deals on three to six of the best performances that are available that evening in your city. The free app is only availalbe for iPhone, and is only currently available in San Francisco and Los Angeles. New York will be added this summer with a national roll-out following.

Both the iPhone app and the site allow customers to name their price and choose where in the auditorium they want to sit. Plus, there are no convenience fees because all of the costs are passed on to the venue or sports team.

So far, the company has been able to maintain an inventory of roughly one million tickets at any given time on the site, and Sinclair says revenues have been growing since they started marketing. As a rough indication, Sinclair said in March they doubled the number of transactions compared to January and that April is already ahead of March.

The company has raised $20 million in two rounds from Bain Capital, U.S. Venture Partners and other individuals.

Photo Credit: Lewis Howes. 

Shares of the New York-based company gained $6 to close at $27.06 today after Reuters reported that the company was in the process of hiring a financial adviser after it received takeover interest from private equity firms.

Travelzoo spokeswoman Lisa Moore declined to comment on whether the company was for sale.

Travelzoo is one of the pioneers in the daily deals business. For more than a decade, it has been sending subscribers a weekly email highlighting what it calls the top 20 travel deals.

A list of obvious acquirers for Travelzoo includes Google, which famously failed to buy Groupon for $6 billion. More recently, Google bought travel company ITA Software. Amazon could also be interested as it pushes AmazonLocal, its daily deals business; however, it already owns a percentage of LivingSocial, the second-largest deals company after Groupon.

A host of other companies could also take a look at the deal, including its travel competitors, such as Expedia or Priceline, or several international providers.

Unlike Groupon, which takes a cut of the revenue when a deal is sold, Travelzoo uses an advertising model where companies pay a fee to get in front of its large email audience. More recently, the company shifted gears to enter the local deals space, offering discounts on restaurants and other local services. In those deals, it charges the merchant a percentage of each transaction.

Today, the company’s market value hovers around $300 million, falling way short of Groupon’s $9 billion valuation and making it a prime acquisition target.

The company’s main assets are its sales team and its list of subscribers, but generally, it is not known as a technology leader. The company’s Web site is still fairly basic with a red, white and blue theme and has very few pictures, which the company says is on purpose. Before any acquisition closes, the potential acquirer would want to know how much the two companies’ subscriber bases overlapped.

In 2011, the company reported revenues of $148 million, up from $112 million over the same period during the previous year.

The online travel agency’s app, called Booking.com Tonight, is the latest to tap into the market of procrastinating travelers who begin looking for accommodations only after the plane’s wheels touch down.

Many of Priceline’s direct competitors, including Travelocity and Hotwire, offer same-day hotel bookings online. And perhaps the most comparable service is HotelTonight, an app developed by a venture-backed San Francisco start-up. Expedia also has a service called Last-Minute Deals that taps user-generated content so that customers can share deals they’ve found with each other, not using any identifying information.

From what I can tell, however, Priceline’s app is a replica of its online site, offering the same selection of hotel rooms at the same price — where’s the Negotiator now?

Still, the app could be helpful in a pinch, because it has a large inventory of rooms, covering 165 countries. The app also lets you search for rooms based on your location and other filters, such as price, star rating or most popular.

In comparison, the HotelTonight app offers a more boutique experience. It features inventory in only a couple dozen U.S. cities and doesn’t have a huge selection of rooms. In a review, my colleague Katherine Boehret found deals at significant cost savings, including a luxury stay at Langham in Boston’s financial district for $199 rather than $275.

One downside of HotelTonight is that you can’t search for nearby rooms until the afternoon, but if you’ve waited until the day of your stay, then I suppose you can wait a little longer.

Earlier today, Priceline’s stock hit a new 52-week high of $775 a share before pulling back to $753.41. Over the past few years, the stock has soared based on strong international growth.

For the past 14 years, Shatner has been the company’s celebrity spokesperson, and for the past five years he has played the role of the “Priceline Negotiator,” a James Bond-like character who stops at nothing to help people find the best travel deals. The latest ad is a cliff-hanger, with Shatner apparently blown to smithereens aboard a plunging bus after giving the escaping passengers some quick travel booking tips.

The Norwalk, Conn.-based company said Shatner will remain under contract, but it’s unclear what will happen to him after his last deal.

Priceline said it decided to kill off the Negotiator character in order to focus on its fixed-price hotel inventory, which is its fastest-growing segment. It will continue to offer its Name Your Own Price hotel service.

The hotel-booking industry is constantly getting more competitive, with several new players, including Kayak, Google and a hotel-backed search service called Room Key.

While Priceline’s future commercials are expected to explore the aftermath of the bus crash, we’ll see if it gets that far. Right after the new ad started airing, the American Bus Association asked Priceline to pull the ad because it “damages the reputation of our industry.” And as for Shatner — well, maybe he transported off the bus just in time, or there was a rift in the time-space continuum, or somehow he managed the kind of escape that kept James T. Kirk going through umpteen shows and movies. Or maybe not.

Priceline’s stock fell 56 cents today to close at $518 a share.

Here’s a look at the new commercial:

As the father of eight kids — now all between the ages of 12 and 21 — he knows a thing or two about the importance of finding the perfect place. (Note: Kaufer delicately calls family trips “adventures,” while getaways with his wife are “vacations.”)

Since then, TripAdvisor has become the online go-to destination for reviews of hotels from Barbados to bed-and-breakfasts in New York City.

In 2004, Kaufer sold the company to IAC for $210 million, setting off a somewhat complicated operating journey. A year later, TripAdvisor spun out of IAC as part of Expedia. It remained a division within the online travel agency until last month, when it broke off into an independent publicly held company.

Today, the Newton, Mass.-based company has 1,100 employees, attracts more than 50 million unique visitors and has published more than 60 million reviews. It trades on the Nasdaq under the ticker symbol “TRIP,” while Expedia continues to trade under the symbol “EXPE.”

Kaufer talked to AllThingsD about being an independently traded company, and about the media company’s prospects for growth:

AllThingsD: What is it like to be out from under Expedia’s wing?

Stephen Kaufer: There was a joke when we were spun out as part of Expedia from IAC. People asked me, “What’s your vision for TripAdvisor?” I would always say, “I want to be bigger than Expedia,” and people’s response always was, “That’s what the little brother might say.”

A year or two ago, we passed Expedia in comScore metrics, and are still experiencing growth. It’s a free service that’s valuable. It’s worldwide. TripAdvisor is in 21 languages, and three-fourths of the traffic comes from outside of the U.S.

Now that you are out from under Expedia, do you have more flexibility on where you send leads that are generated from people reading reviews on TripAdvisor?

Under Expedia, we had no obligation to send traffic to them … That never happened, and we were allowed to run independently. But at the end of the day, they [competitors] knew their marketing spend was going into Expedia’s pocket. That’s the most exciting thing. We are now completely independent. Expedia now owns no stock, so when I talk to Orbitz or Priceline, these folks can now partner with TripAdvisor without any hint of helping to fuel the competitors.

Why the spinoff now?

It was announced back in April, but basically there was a view that there was a class of investors that liked a pure Internet category leader and a fast-growing media company like TripAdvisor, and there’s another class that appreciates Expedia, which is in the dominant online travel agency position.

We were blurring the two when they were together. It gives Wall Street the opportunity to invest in either, and each company will find its own set of investors.

Do you think Wall Street is correctly valuing TripAdvisor? (The stock failed to come roaring out of the gate.)

No. But I’m not complaining. I think Wall Street, over the next couple of quarters, will appreciate how both companies perform as independent companies. The numbers have been a little hidden because they were jumbled together. … They’ve never seen TripAdvisor operate independently. They ask, “What will you do differently? How will things be the same?” Watch us, and I think you’ll like what you see.

Will you grow mostly organically, or through M&A?

We have a good track record on acquisition and product innovation.

The last few acquisitions, you saw a focus on our strategic priorities: A mobile company, a social company, two vacation rental companies and a company in China. Our four key investment areas that we called out are vacation rentals, mobile, social and geographic expansion.

In many ways, TripAdvisor was one of the original social networks, where users shared information on their vacations. Now you see Facebook getting into the space with Facebook Connect and other initiatives, too.

Everyone feels like being able to get travel recommendations from their friends is a natural evolution for getting a better recommendation, period.

There’s a couple of different angles. Some social travel companies are focused on making planning a group trip easier. No site out there has scale and does that well, and we don’t do that now. Facebook is a great platform to do it on, and it may be interesting to us in the future.

Our focus is leveraging the friend graph on Facebook and our rich content to give someone the experience of seeing recommendations or ratings from friends.

We love the concept, and we are furiously building up our own product offering to make it more valuable. If it’s not too early to call someone a leader, we are clearly it, because we have the content and the friend graph. We aren’t a site that’s based on Facebook, which is an advantage, because you can do anyting you want to do on the Web or the tablet or mobile.

What about Google moving into travel?

They have a couple of different approaches. They have Google Places, which reviews everything; and they have Google Hotels, which is a hotel finder; and then Google Flights, to help you find the best fare.

With Google Places, they still can’t seem to generate enough high-quality reviews to be useful. They compete with Yelp and us, and I’ve yet to be concerned. I was concerned about Google Flights — a lot — before they launched, but you cannot book through an online travel agent like Expedia — only directly through the airlines for now.

It’s an incomplete product, so I still use TripAdvisor flights, or go to Expedia or Orbitz. They get better results, and maybe aren’t as fast, but more information is still better.

They say they want to include online travel agents, but the airlines won’t let them. … Don’t mistake my tone for being sympathetic to Google on this one.

What about vacation rentals? HomeAway went public last year.

After HomeAway, there’s not that much.

We agree it’s a great market, and it deserves to be online. It helps consumers and there’s a need to bring a trust element into the equation. Folks who have tried it have liked (renting homes), and a whole lot of people haven’t tried it, because a hotel is all they’ve ever tried.

If they are reading hotel reviews, but I see that you are trying to stay seven nights in Orlando, I might say, “Did you know that you might be able to save money and get a private swimming pool?” They never would have thought of that as an opportunity, but there’s lots of great opportunities in Orlando and tons of other cities.

HomeAway dominates the category, but there’s plenty of room for a second, third and fourth.

I’m surprised that already three-fourths of your traffic comes from outside the U.S.

Yes, and that portion is growing. We have offices all over the globe, and our biggest investment opportunity is in China. We purchased a metasearch site for air, hotel and train in China. We view international growth as a tailwind to the business.

So what’s your price target for the stock? It’s currently trading around $25 a share.

I’m looking at how I can grow the business over the long term, and that’s why we are making some of these investments. I might be ahead of it, or other folks ahead of me, but I’m a nuts-and-bolts operator. I like to build stuff, and getting TripAdvisor to the next level of functionality and awareness is my priority — not the stock price.

In April, Expedia proposed a plan that would break the business into two public companies.

One would be a travel agency, focused on selling air, hotel and car rentals, and the other would be TripAdvisor, the travel reviews site that operates in 27 countries and 19 languages.

The deal is expected to close on or about Dec. 20, including a one-for-two reverse stock split immediately prior to the spin-off. Expedia will trade under the symbol EXPE and TripAdvisor will trade under TRIP.

Today, the company filed a presentation with the Securities & Exchange Commission detailing Expedia’s standalone growth prospects. The case will be an important one to make given that TripAdvisor is often seen as the more attractive of the two companies.

The Bellevue, Wash.-based company plans to present the slides to various investors and analysts over the next two-and-a-half months.

In the presentation, Expedia lists three major growth opportunities: International expansion, especially in Asia; a greater concentration on hotel bookings, which have higher margins than airplane tickets; and new distribution platforms, such as cellphones and tablets.

Expedia is a traditional travel agency that collects fees when an airfare or hotel room is booked. Meanwhile, TripAdvisor, which aggregates user-generated reviews, produces revenue from advertising, as well as fees when users book through other sites, such as Priceline or Orbitz.

In the quarter ended in September, TripAdvisor’s revenue jumped by 30 percent compared to the same period a year earlier. Meanwhile, Expedia’s revenues rose only 14 percent.

Additionally, the company is breaking up as it faces increasing competition from Google, which has started integrating the technology of ITA, a travel software company it acquired, into its search results.

Expedia’s stock today is trading at $28.65, up 61 cents.

During the Norwalk, Conn.-based company’s third-quarter conference call today, it fielded questions about the impact of Google adding airfare and hotel information to its search results through its acquisition of ITA Software.

Priceline CEO Jeffery Boyd said that, so far, it looks like Google has created “platforms that can be operated as an efficient vehicle for advertisers to get qualified leads.” He added that his company’s approach is “as an advertiser, and to participate as effectively as we can.”

Some companies, including Kayak and Expedia, worried about Google’s market power if it was able to acquire ITA. But Priceline did not object, Boyd said.

“The transaction was approved and we think it’s incumbent upon our industry to find the best ways to integrate and advertise on it, and try to get the wealth of qualified customers that Google is trying to drive toward us,” he said.

The downside: If Google is able to send more qualified leads, it might be able to charge advertisers more.

Priceline beat analyst expectations in the third quarter. Revenue grew 45 percent, to $1.4 billion; net income doubled to $469.5 million, or $9.17 a share, compared to the year-ago period.

In normal trading, the stock fell $4.37 a share, and continued sliding after hours, falling another $8.87 to $500.13 a share.

UPDATE: Shareholders reversed their opinions later in the session, pushing the stock up $8.25, or 1.6 percent, to $509.00.

During the quarter, revenues grew 45 percent to $1.4 billion and net income doubled to $469.5 million, or $9.17 a share, compared to the year-ago period.

Analysts were expecting the company’s non-GAAP results to total $9.30 a share, according to First Call. On a non-GAAP basis, the company reported a profit of $9.95 a share to easily beat that.

However, the company said it expected some softness in the fourth quarter, especially given the economic uncertainty in Greece and other European states, and less travel demand for Thailand due to widespread flooding.

In the fourth quarter, it forecasts year-over-year revenue increases of 27 to 32 percent, and non-GAAP net income of between $4.90 and $5 a share.

In an exclusive interview with AllThingsD, Robert Birge, Kayak’s chief marketing officer, said the current market is too volatile and is not meeting the company’s expectations.

“We are going to file when the market conditions are favorable to IPOs,” he said.

In the meantime, Birge said, Kayak is committed to keeping its filing up to date with the Securities and Exchange Commission, so if the conditions change, the company will be able to move quickly.

“It gives us the flexibility to respond to market conditions,” he said.

Kayak, which filed 11 months ago to raise at least $50 million, is one of roughly 200 companies that make up one of the biggest IPO backlogs in the past five years.

Two other high-profile examples are Groupon, the daily deals site that wants to raise $750 million, and Zynga, the social games maker that is seeking $1 billion in additional funding.

Kara Swisher reported last week that despite copious amounts of negative press, Groupon has no plans to back down from going public. Likewise, according to our sources, Zynga’s IPO remains on track.

Birge was not able to elaborate on the company’s plans or whether it was seeking alternate exits, like a sale or staying private and raising more cash. The Norwalk, Conn.-based company updated its filing recently to suggest it was looking at other alternatives as an IPO became less likely.

But unlike Groupon or Zynga, which filed this summer to go public, Kayak has had nearly a year to pull the trigger, which predates much of the market volatility, raising the question of why it has taken Kayak so long.

Birge said even if the market conditions are right, the SEC must sign off on the offering in order to go public.

Perhaps the market will be more favorable once there are more comparable companies with positive valuations. Already there are a number of other public competitors, including Priceline, Orbitz and Expedia.

One big public event coming up will be Expedia’s spin off of TripAdvisor, which will create two separately traded entities. In that scenario, Expedia’s results would no longer also include TripAdvisor’s advertising business, and Expedia alone could more closely resemble Kayak’s business.

As a result, Greystripe, a mobile ad network purchased by ValueClick in April, says that it has seen travel-related mobile ad campaigns increase by nearly 50 percent over the past year.

In a study, it found that the overwhelming majority of iPad owners, or 91 percent, used their device for a travel-related activity. The data was collected from Greystripe’s 971 users on a network of iPhone (including the iPod touch), Android and iPad devices during June.

Specifically, it found that 47 percent of iPad users booked hotel rooms, which seems to coincide with the boom of applications catering to this activity.

I’ve written in the past about how travel companies are flooding the mobile app stores, including Expedia, Kayak, Priceline and even start-ups, like HotelTonight, which will find you a room the night you need it. What’s more, InterContinental Hotels Group, the massive hotel chain that includes Holiday Inn, told me it recorded $10 million in mobile revenues in April, jumping from only $1 million in the same period a year earlier.

Following closely after hotels, Greystripe said 37 percent of iPad owners used the tablet to book a flight; 28 percent have used it to make a restaurant reservation; and 24 percent have used it to rent a car.

Although Greystripe found that applications were not required, in fact, 69 percent of iPad users were more likely to use the mobile Web compared to 49 percent of iPhone and Android users.

You can probably guess what it is: A search engine that helps you sort through flight information and fares. It’s not exactly going to knock your socks off, but it’s an indicator of things to come. Google has said in the past that it thinks there’s still room for innovation in the travel search and booking market.

One thing I noticed is that you can already see flight information showing up in regular Google search queries highlighted by a tiny blue airplane in the results.

Google produced a video showing the service in action, which I’ve embedded below.

Since it was founded in 1994 as a research lab, Walker Digital LLC has made much of its money by spinning out its inventions, like online travel agent Priceline and vending-machine firm Vendmore Systems LLC, as independent businesses.

But this year the Stamford, Conn., company has changed its strategy. After putting his patent portfolio up for auction last year, but failing to have his asking price met, Mr. Walker in February forged ties with IP Navigation Group, a self-described “patent monetization” firm. Since then, Walker Digital has filed about 30 lawsuits targeting hundreds of companies, including Amazon.com Inc., Zynga Inc. and Google Inc., alleging they violated one or more of the company’s roughly 400 patents.

Read the rest of this post on the original site »

The travel company, which focuses on booking hotel rooms under several different brands around the world, said its international operations contributed revenues of $612.9 million, a 90 percent increase versus the second quarter 2010.

Priceline also reported that profits spiked, totaling $256.4 million or $5.02 a share in the second quarter, compared to $115 million or $2.26 a share in the same period a year ago.

The Norwalk, Conn.-based company easily beat analysts’ expectations, which usually base calculations on non-GAAP figures since the totals exclude some items.

The company’s non-GAAP income in the second quarter was $282 million, or $5.49 a share, to beat the street’s estimates of $4.89 a share. Revenues of $1.1 billion were about even with the Street’s estimates, which were expecting $1.08 billion.

In a release, the company’s CEO Jeffery Boyd said the strong second quarter was driven by global hotel and rental car bookings, which increased 56 percent and 55 percent respectively compared to the second quarter 2010.

The company said its third-quarter outlook includes continued increases in travel bookings that are on par with the second quarter, if not slightly lower, and non-GAAP net income between $9.10 and $9.30 a diluted share.

The company’s stock tumbled more than seven percent today, or $38.63 a share, to close at $483.34 a share, along with the overall market, which saw one of its worst days in years due to the debt crisis in Europe.

I wasn’t able to attend in person, but wanted to post the list of companies as part of NetworkEffect’s coverage of spring Demo Days from other major start-up accelerators. (See: Y Combinator, AngelPad, 500 Startups.)

From an outsider’s perspective, there are some very trendy topics in here: loyalty and rewards, social classifieds, one that sounds like a sort of Priceline for Gilt Groupe. There’s also some non-typical incubator fare: Immersive, for example, says it can detect faces in order to target digital ads in retail stores.

These are the companies and their taglines:

Nestio: Best Web and mobile platform to organize your apartment search.

ThinkNear: Yield management for local merchants.

Immersive: Advertising technology for smarter digital signs.

Friendslist: Social classifieds.

OnSwipe: Platform for easy tablet publishing and advertising.

CrowdTwist: Social loyalty and rewards platform.

MigrationBox: Cloud data migration.

ToVieFor: Fashion plus e-commerce plus gaming.

RedRover: Peer-to-peer learning platform for enterprises.

Shelby.tv: Best way to discover and enjoy Web video.

Veri: Learn, teach, play. Online.

More detail can be found in these Xconomy, GigaOM and Business Insider reports.

After roughly nine months of antitrust scrutiny, the justice department has approved Google’s acquisition of ITA, acting quickly before the government faces a potentially shutdown due to budget disputes. And, not surprisingly, all parties involved are claiming victory.

Google announced an agreement to acquire ITA Software, a Cambridge, Massachusetts flight information software company, for $700 million in July 2010.

The acquisition was immediately identified as a threat to companies, such as Kayak and Orbitz, which rely on ITA’s data. Likewise, the federal regulators took the opportunity to take a close look at the deal’s ability to fuel Google’s continuing search dominance. However, the deal was largely expected to be rubber stamped because it represented a vertical expansion for Google, and not a gain in general market share.

The concessions laid out by the Department of Justice today has calmed the nerves of the deal’s harshest critics.

“This is a clear win from our perspective,” said Tom Barnett, counsel to Expedia, and former head of the Antitrust Division of the U.S. Justice Department during a call organized by FairSearch.org, an advocacy group that opposed the acquisition. “We are very happy about that, but we are also aware of the fact that this is one transaction in one section of the Internet. We do think that it’s important that people bare that in mind and remain vigilant.”

The two biggest concerns by ITA’s customers was that the company’s data would remain available to them and that Google would not have access to their proprietary data.

Under the terms of the agreement, the department will require Google to establish internal firewall procedures to ensure competitors’ intellectual property and that ITA’s customers will be able to extend their contracts into 2016. New customers are also ensured that they will be able to license ITA’s software on “fair, reasonable and non-discriminatory terms” into 2016. What’s more, the proposed settlement provides for a formal reporting mechanism for complainants if Google acts in an unfair manner.

On the same call, Kayak’s Chief Marketing Officer Robert Birge, said that Google’s likely happy with the terms because it got what it ultimately wanted — to acquire ITA. But that doesn’t mean that the terms weren’t vigilant enough to make customers of ITA happy, too.

“Their deal got cleared, so of course they are going to spin it how they like, but the Justice department has taken action to ensure competition. We are still looking at the specific details, but from a cursory look, it’s clear they protected our access and have protected our own proprietary technology that we’ve developed over the past seven years. It’s unambiguous to us that this is pleasing to us.”

We’re sure the deal’s closure after nine months also is pleasing to ITA’s investor list.

As soon as the court accepts the Justice Department’s proposal, you can imagine the $700 millions being distributed to all parties involved. In 2006, ITA closed $100 million in equity investment. Its investor list includes: Sequoia Capital, Battery Ventures, General Catalyst Partners, PAR Investment Partners and Spectrum Equity Investors.

In a short statement by Google, Jeff Huber, Google’s SVP of Commerce and Local, was enthusiastic about the Justice Department’s actions: “We’re moving to close this acquisition as soon as possible, and then we’ll start the important work of bringing our teams and products together. We’re confident that by combining ITA’s expertise with Google’s technology we’ll be able to develop exciting new flight search tools for all our users. Up, up and away!”

This doesn’t mean that Google is entirely in the clear.

As Digital Daily’s John Paczkowski wrote earlier this week, Larry Page has a lot to look forward to as his tenure as CEO, such as a European probe of the company’s search and advertising operations, a Texas investigation into allegations of “manual overriding or altering of” search result rankings, and perhaps that long-in-the-works Federal Trade Commission probe.

One would be a travel agency, focused on selling air, hotel and car rentals and the other would be TripAdvisor, the travel reviews site that operates in 27 countries and 19 languages.

The split-up was a surprise today, many brows furrowed as to the significance of the timing, since the travel industry is facing a number of major disruptions.

Today, reports said Google and the Justice Department could ink a deal over the next couple of days that would allow the search giant to purchase flight-data company ITA Software for $700 million. One of its biggest partners, Kayak.com, is also zeroing on its IPO. Kayak is also beginning to book hotel rooms directly with its customers, rather than always redirecting to other sites, such as Expedia.

But much of the thought process has to do with what Expedia thinks its business is worth, compared to Wall Street’s valuation.

While Expedia’s travel agency business garners the most attention, it is TripAdvisor that has the bigger growth story, but in many respects is hampered by being tucked under Expedia’s  much larger wings.

Expedia CEO Dara Khosrowshahi told the WSJ that TripAdvisor is now big enough to be on its own. “It is a matter of size, globalization and diversification of revenues…It is really ready to stand on its own.”

On its own, it could be worth as much as $4 billion, according to some estimates, which is way above the $237 million Expedia purchased it for in 2004.

TripAdvisor makes money from advertising as well as from affiliate fees when users book through other sites, such as Priceline or Orbitz. TripAdvisor is the high-growth and high-margin business of Expedia today.

In 2010, TripAdvisor’s revenues totaled $486 million, up 38 percent compared to the year-ago period. Operating income in 2010 totaled $260 million, increasing 33 percent year over year. Its margins are slightly above 50 percent. Contrast that to Expedia’s overall transaction business, which is much larger, but is seeing a more modest annual growth at 20 percent.

But a lot of that growth story is not as easy to see on the surface.

Meanwhile, one of Expedia’s largest competitors, Priceline, continues to be appreciated in the public markets. Its stock hit a recent 52-week high after one analyst boosted its price target to $610 from $575.

In after hours trading yesterday, Expedia shares jumped 14 percent to $25.51 after closing $22.40 in the regular session. Today, Citi Investment reiterated its Buy rating at a $29 price point and called it a value play.

Not all analysts believe the break-up is the right thing to do.

Fitch Ratings, which is watching closely to see how the plan will affect the company’s bond ratings, wrote that TripAdvisor as a stand-alone entity will likely represent a significant new competitor to Expedia. It believes that TripAdvisor will now have much more flexibility to pursue a model that’s similar to competitors such as Kayak, which can promote hotel direct bookings in favor of directing traffic to online travel agencies, such as Expedia.

That is a particular concern because a large majority of Expedia’s revenue comes from hotel bookings, which has higher margins than airplane tickets.

In the past few weeks, Expedia has rolled out a hotel reservation application that will be the cornerstone of a much broader push into mobile. Kayak also announced it will shift its business to take hotel reservations directly, in a move toward creating a better mobile experience. Priceline’s Booking.com property also has applications, and individual hotel chains like Best Western have released apps of their own.

And then there’s HotelTonight.

The San Francisco-based company has an iPhone application that allows you to book last-second hotel rooms the day you are looking–for reduced prices.

HotelTonight is announcing today that it will allow users to book up to five nights at a time. It is now also available in Seattle and Miami in addition to New York, Los Angeles, San Francisco, Chicago, Washington, D.C. and Boston. Dallas, Philadelphia and Atlanta will launch soon.

The one-off single-purpose applications for now appear to be standard. To be sure, they allow for easy-to-use streamlined experiences, but it’s unclear whether consumers will demand a one-stop experience over time as companies get better at adding sophistication without complexity.

So far, HotelTonight has clocked 250,000 downloads in its first two months, and is encouraging more downloads by giving away a $25 credit good toward the first booking after registering.

The company was founded by Sam Shank, who is CEO. Shank, who is bankrolling the operation while they try to raise a round of capital, previously founded and was CEO of DealBase.com and CEO of TravelPost.com, which was acquired by Kayak.

HotelTonight allows people to book a room as late as 2 a.m., which is often hours later than the big aggregated sites. The company also sends its own photographers to take mobile-optimized photos, and has writers produce descriptions that include relevant information for last-minute bookers.

Starting today, the additional category takes off, offering steep discounts to hotel rooms around in about 30 locations.

The launch of Overstock’s vacation category–its fifth new category since 1999–marks a substantial investment for the publicly held company.

The decision to pick travel is in line with what Gilt Groupe’s Jetsetter and LivingSocial.com’s Escapes are doing in terms of offering occasional deals to certain locations. With all of them, the focus is on price, not selection.

But rather than Gilt’s high-end affluent niche and LivingSocial’s curated-packaged approach, Overstock’s inventory is more for the masses–something you’d expect from Expedia, Orbitz, Priceline or Travelocity.

On day one, the choices will vary.

Three nights at the Crowne Plaza London at Heathrow costs $207.85 per person during May. In June, the four-star Renaissance New Orleans Marquette Hotel will run $238.14 per person for three nights. A perfectly decent hotel in Honolulu, which is a little drab and is across the street from the beach, will cost $351.25 per person for seven nights.

But how much you are saving is not exactly obvious.

“We’d love to put the rack rates up there, and if you go to other travel sites, you’ll see these are slick deals, but at the moment we aren’t putting up the rack rate,” said Overstock’s CEO Patrick Byrne. “The suppliers would like to make it not so transparent.”

The Vacations tab will be featured prominently at the top of the web site, along with the other categories of Shopping, Cars, Real Estate and Auctions.

The addition follows other recent launches by Overstock, including Eziba.com, which focuses on selling a small number of items, ranging from furniture to jewelry, at heavily discounted prices via a daily email.

As for the Vacations business, Byrne said they’ve hired a dedicated sales team to source the deals. “We have been working on it for about a year, and we believe we can expand the cities and inventory very quickly.”

The deals are colorfully laid out on the page to highlight the scenery in each location. They can sell out, or at least that’s the hope.

“This is the equivalent of a private shopping site. They will sell out and quickly. Or, at least we hope so, and then we’ll go get more,” Byrne said.

In doing so, it moves from an independent third-party aggregator to a competitor of the hundreds of travel sites it compares on a regular basis, such as Hotels.com, Hotwire, Priceline and Expedia.

The feature was released today in a limited beta, and will be fully functional in a few weeks, both online and on its iPhone application.

Since Kayak was founded seven years ago, it has been aggregating airline and hotel listings from hundreds of sources to give visitors the best options and price. But it was not known for selling directly to the consumer.

The company, which has filed for an initial public offering, traditionally has earned revenue from sending referral traffic to companies like Expedia and Orbitz. In fact, Expedia accounted for 25 percent of its revenues in the first nine months of 2010, and Orbitz made up 19 percent of its revenues.

In that period, it generated $128 million in revenue and processed more than 469 million user queries for travel information.

Now, the Norwalk, Conn.-based company has decided to go head-to-head with some of its biggest customers.

To do so, the company is partnering with the Travelocity Partner Network, which will be processing the transactions and providing customer service to anyone who books directly on Kayak.

In an interview, Paul English, Kayak’s co-founder and CTO, told us he believes the two businesses can co-exist because they still provide an extremely low-cost lead generator for all of their partners.

While the feature is being rolled out online and on mobile, he said the decision to start booking directly had more to do with the consumer’s experience on the mobile phone.

In a statement, Steve Hafner, Kayak’s CEO and Cofounder, said: “Our users value that we give them choices on where to book, though some people would prefer to complete their purchases without leaving KAYAK…For people who use KAYAK’s mobile app in particular, this will make booking much easier.”

Currently, if a customer is searching for a hotel and wants to book something, they will be kicked out of the app and redirected to another company’s web site in the browser in order to pay for it.

The poor experience causes many people to drop off, and conversion rates are low.

If the transaction can be completed inside the application, a user’s payment options can be stored, and it can be completed in a couple of clicks.

English would not say how much traffic its mobile application is getting, however, as one of the more popular travel apps on the iPhone, it makes up a notable number of its three million daily searches, he said.

So far, its mobile applications have been downloaded more than five million times, and he said there are some users who only search Kayak from the phone.