Kayak buys Sidestep for $200mm

Hot of the blogsphere care of TechCrunch and days after I pondered if an OTA would buy a meta-search provider we find that Kayak has raised $196mm, from pretty much everyone on Sand Hill Road and used the money to buy Sidestep for around $180mm (plus $20mm in cash reservers at Sidestep equals $200mm). Arrington has the full story here.

Sidestep will lose 55 staff (out of 75) including CEO Rob Solomon (after 60 day transition.

What are the possibilities here:

• Do they keep two brands?
• Do they merge the content businesses that each of them built or bought to do SEO?

The biggest question of course - is this a sign of strength in the market with one and two coming together to dominate or a sign of weakness that they need to get together to survive? Deal of the year at the last moment in the year.

UPDATE - Adam Healey over at VibeAgent has crunched some numbers on the deal putting the combined entity (or new Kayak) at a valuation of $450 million or a P/E of 35 (assuming 15% margin on TechCrunch's reporting of combined revenues of $85 million).

UPDATE 2 - Interview here with Kayak's VP Communications Kellie Pelletier about the deal,