Kayak to become transactional site in deal with Travelocity Partner Network

Kayak, the travel meta search company, is moving closer to becoming an online travel agency through a new deal with Travelocity.

Under the agreement, Travelocity Partner Network will power Kayak's new hotel booking engine. The deal will for the first time enable bookings on the Kayak site, which previously referred all transactional activity to is partner supplier sites.

Financial terms of the agreement were not disclosed.

The move could be a sign that Kayak is further hedging its bets against the potential consequences of an acquisition of ITA Software by Google.

Kayak has been a vocal opponent of the proposed acquisition, and approval of the deal by the Justice Department is rumored to be imminent.

Kayak, along with Orbitz and several major airlines, is a user of ITA Software's QPX air fare shopping software.

Steve Hafner, Kayak's chief executive officer, has argued that if Google acquires ITA, it could ultimately drop current QPX users as customers and solidify its position in the air fare search market.

Last month, Kayak and Bing Travel signed a partnership agreement to incorporate Kayak travel search services within Bing Travel in the U.S, starting with flight search.

Both Kayak and Microsoft, Bing's parent, are members of FairSearch, an organization formed to encourage the Justice Department to block the acquisition of ITA Software by Google.

The proposed acquisition "threatens the competitive online travel search market, and could limit the competition and innovation that benefits consumers," the group says.

"If the transaction is approved, consumers should expect to face higher prices and less choice when searching for travel online."