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Facebook’s rocky IPO has Kayak on hold

Kayak Software Corp. is holding off on going public. Facebook Inc. appears to be the blame.

Online travel company Kayak has pulled back from preparations for an initial public offering meant to raise $50 million, less than two weeks after Facebook hit the open market and quickly plummeted.

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A person briefed on the matter, but who was not authorized to speak, confirmed that the company is delaying its IPO until market conditions improve.

“Kayak is just unfortunately being bounced around by the Facebook IPO wake,” said Henry Harteveldt, an online travel industry specialist with Atmosphere Research Group in San Francisco.

“I’m surprised, because Kayak has demonstrated growth, but I have a feeling there’s just concern in the air on the part of Kayak and their bankers. You can only go public once, and it’s got to be right.”

Kayak was widely expected to be the next technology company to hit Wall Street after Facebook. A spokeswoman for Kayak declined to discuss whether it has delayed its plans, but noted the company had not set a date to go public.

Facebook debuted on the Nasdaq Stock Market on May 18 at $38 a share, but closed Wednesday at $28.19, a 26 percent drop.

Its performance has drawn scrutiny from investors and regulators and earned Facebook a dubious title from Bloomberg News: worst-performing IPO from a large company in the past decade.

“After such a rocky debut for Facebook, investor confidence is going to be shaken,” said David Donovan, a vice president at the Boston consulting firm Sapient Global Markets. “When Facebook was disappointing, that certainly hurt [Kayak’s] chances for having a positive opening as a public company.”

Kayak, which has operations in Concord and Norwalk, Conn., was launched in 2004. It has been cautiously watching the markets for two years, said analysts, waiting for the right time to make its market debut. It has grown significantly since it first filed papers in November 2010 to go public.

The company’s annual revenues grew by 32 percent to $224.5 million last year.

Kayak faces growing competition from TripAdvisor Inc. in Needham, newcomer Hipmunk Inc. in San Francisco, and Google Inc., which acquired the Cambridge travel software firm ITA Software Inc. for $700 million in 2010 and has since launched its own flight-search product. Still, “Kayak has really built up a strong following and has a strong brand name,” Harteveldt said.

The timing of its IPO after the Facebook flop, he added, was “an unfortunate hiccup.”

Michael B. Farrell can be reached at michael.farrell@globe.com.
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