Travelzoo Shares Surge on Sale Report
NEW YORK (TheStreet) -- Struggling online travel company Travelzoo(TZOO) is reportedly considering an outright sale, as weakness in its core travel-related advertising revenue led to an over 70% stock drop in the last 12 months.
Travelzoo is in the process of hiring a financial adviser, as the company looks for an acquirer of its Web and newsletter businesses that link vacationers with flight, hotel and resort deals, according to a Reuters report, citing three unnamed sources. Private equity firms, including Permira, and online travel company ODIGEO, have already shown takeover interest in Travelzoo, the report said.
Travelzoo competes in the online market for travel deals with Priceline.com (PCLN) , Expedia (EXPE) and Tripadvisor (TRIP) , however it doesn't directly offer travel packages. Instead, Travelzoo calls itself an internet "media company" and earns advertising revenue tied to travel deal recommendations to its 24 million newsletter subscribers and visitors of its website.
In 2010, ITA Software was bought by Google (GOOG) for $700 million in one of the largest online travel deals of recent years. Prior to speculation of an eventual takeover, Travelzoo had a market cap of $336 million.