Kayak is my first stop whenever I need to book a flight or hotel room. I still generally handle the transaction through Orbitz, but I find Kayak to be the better choice for finding flights and tracking fare changes. I’ve always wondered how the site works as a business. They do run ads, but I wondered if they also collected some kind of transactional fees for travel booked through their search results.
The New York Times Bits blog posts today on how Kayak works, on the occasion of the site landing $196 million in venture funding. It turns out that Kayak does collect fees from 90% of the airlines and all of the major hotel companies.