Core Growth Stocks for Your Portfolio – Priceline.com Inc (PCLN)

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Could Google Inc (NASDAQ:GOOG) disrupt the travel industry? The company has been gaining influence in the business through its purchase of Zagat, Panoramio and ITA Software. If Google can harness the awesome power of its search engine, YouTube, and other services the company could upset the balance in the industry by offering a better, simpler service.

Google Inc (NASDAQ:GOOG) certainly has the scale and resources to execute on its vision. If successful, it could grab a significant slice of the industry, and travel may represent a huge hidden catalyst for the stock.

However, Priceline has taken steps to address the Google threat. In May, the company completed its $1.8 billion acquisition of Kayak. Rather than partner with airlines and hostels directly, Kayak tallies offers from other travel agencies – Priceline, Expeida and Orbitz – and complies it in one place. Kayak is essentially a search engine of search engines.

The acquisition is smart for two reasons. First, Kayak will reduce the amount of money Priceline pays Google for online advertising. Second, Kayak will secure a steady stream of traffic to Priceline websites regardless of what Google does.

Foolish bottom line

Despite these risks, Priceline.com Inc (NASDAQ:PCLN)’s compelling growth story and sustainable competitive advantage mean this stock should be added as a core holding to your portfolio.

Robert Baillieul has no position in any stocks mentioned. The Motley Fool recommends Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), Google Inc (NASDAQ:GOOG), and Priceline.com. The Motley Fool owns shares of Ctrip.com International, Google, and Priceline.com. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article 7 Core Growth Stocks for Your Portfolio – Priceline originally appeared on Fool.com and is written by Robert Baillieul.

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