Rumors about the acquisition of Farecast are accurate - in a very brief blog post CEO Hugh Crean says they’ve been acquired by Microsoft.
SeattlePI, which first broke the rumor last week, says the price tag was $115 million. While the two companies are an understandable fit given their proximity and partnership over MSN Travel, SeattlePI reports that Farecast entertained multiple offers before accepting Microsoft’s.
Farecast is an airfare pricing comparision tool that also uses a predictive algorithm to recommend when you buy your ticket. So the idea is to show the user not just who has the cheapest ticket, but whether or not waiting might make sense as well. The site has also guarantees tickets at its predicted prices for an extra charge. As of this past fall, it also began helping travelers determine the fairness of hotel pricing.
The deal follows the acquisition of competitor SideStep by Kayak in December.
Shows that innovation pays.
I agree!
a Ha! I saw this go by on Twitturly about 25 minutes ago. I guess it proves what I am working on works.
Shameless plug: http://www.twitturly.com
Tried Farecast and got about 20 pop-under windows. Maybe advertising pays
Will be interesting to see how Google responds.
http://stevemurch.typepad.com/.....strat.html
Congrats to the farecast team! The product was innovative, let’s just hope that the MS culture doesn’t kill that spirit.
115M Down. 885M to GO>
Farecast is a fantastic tool, I hope Microsoft leave it just the way it is!
I loved Farecast, but I wonder if I’ll use it with Microsoft taking over. My general experience is that Microsoft makes clunky products, so I wonder if some other enterprising start-up will form to make the product Farecast is now, but will likely cease to be.
Yeah that is some serious change…
Pretty cool concept. Microsoft will probably integrate it into Windows Live somehow and vamp up revenue through their advertisement networks
Just FareCompare left then, FareChase, SideStep and FareCast all been bought.
Yapta still available, right?
Good Buy Microsoft. Farecast is a very cool and innovative service that brings a breath of fresh air to the online travel business. Very web 3.0 imo. I hope MS pumps tons of money into these guys and really broadens their service offering to other areas of travel and potentially beyond. Good deal all around - Farecast, MS and customers win.
Boris
Software Headhunter
http://www.askbinc.com
I’m not buying that valuation. I would guess it is less than that.
–Mike
http://www.thisistech.com
FareChase is a great tool lets hope hes just a sillent owner and dont mess around with it to much.
-Britec-
http://www.pcrepairhertfordshire.co.uk
There’s also Liligo, the leading European travel search engine, funded by Alven Capital. You should check us out!
Pierre
http://www.liligo.com
does anyone know what data mining/predictive analytics tool they use?
There is nothing clever about farecast except the presentation. All the airlines publish their fares, and most you could get access to the same data. The data is fairly complex, but not rocket science.
The prediction model is based on the same prediction model that airlines use to set their fares. This model already does not hold for the low-cost airlines who change their fares more often - and offer 50% discount specials randomly - for marketing and not for revenue purposes.
@19:
Getting/compiling all that price data from the airlines is totally non-trivial - and then analyzing it isn’t either - and when you have it all together in an organized way it’s definitely a defensible and valuable data asset.
@downthedrain - LOL read up will you please, only 7 companies in the world process the full airfare data feed.
Microsoft should make more of these kinds of acquisitions. Lots of small(er) companies with value and potential.
Does anyone have a guess what their 2007 or projected 2008 revenue is?
This is a cheap acquisition because it is about SEARCH and not about TRAVEL. Travel is one of the largest categories of search query volume, and Microsoft has been extremely clear about their goal of pursuing a more aggressive verticalized approach on Live.com to differentiate vs. Google. Try the sample search “digital cameras” on Live.com and you’ll see what I mean. So this is a building block in the great game of search dominance and compared to Yahoo! this is a small price to pay for a digestable acquisition that will help the Search experience AND provide potential contextual targeting opportunities too.
We posted on it here:
http://www.uptake.com/blog/tra.....g_253.html
good call by microsoft!