Seattle based Farecast, a service that predicts and guarantees airline prices, has expanded its reach outside of the United States, with international coverage in key markets.

Farecast, which launched in May 2006, tries to predict flight price changes for consumers so they know whether to buy now or wait. In late 2006 they added guarantees, effectively allowing consumers to buy insurance policies against price increases in the event they decide to wait. More recently, Farecast added hotel bookings as well.

The site now offers predictions for over 200 markets between U.S. cities and Europe, Mexico, the Caribbean and Canada. According to USA Today, travelers can search for international trips up to two weeks long and six months out and Farecast will predict whether fares will go up, down or hold steady over the next week.

The new extended service still has limitations, for example a search for San Francisco International (SFO) to London Heathrow (LHR) offers airfares, but doesn’t provide a prediction service despite LHR being a major gateway into Europe, where as SFO to Mexico City now does. Farecast can be used in a similar fashion to general travel sites such as Expedia as a general airfare and booking service; a search for Melbourne (MLB) to SFO gave similar results to the SFO-LHW search, although despite Farecast providing price comparison links to sites including Expedia, there was no price advantage at all over the other sites.

Farecast operates in a highly competitive space, more so since Kayak acquired Sidestep in December. Farecast’s traffic has trended up over the long term, but it is still lagging in third place (see comScore chart below).

(thx to Mark Douglass for the tip)

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Discount travel site Kayak has acquired rival SideStep for $200 million. This story was set to be announced tomorrow but word is leaking all over the place after Sidestep CEO Rob Solomon told his company employees the news at an all hands meeting.

This is a two part deal. Kayak raised $196 million in a new round of financing from their existing investors (Sequoia Capital, General Catalyst Partners and Accel Partners), two of SideStep’s existing investors (Norwest Venture Partners and Trident Capital), new investors (Oak Investment Partners and Lehman Brothers Venture Partners) and debt lenders (Silicon Valley Bank and Gold Hill Capital). Prior to this new round, Kayak had raised $27 million in capital.

Kayak subsequently acquired SideStep. Terms are not being disclosed, but we are hearing that the deal was for $180 million in cash. An additional $20 million that SideStep holds in cash is being distributed as well, making the total deal size around $200 million.

SideStep and Kayak are the two leaders in the discount travel search space (along with Mobissimo and Farecast). Kayak is reportedly doing around $50 million in yearly revenues, compared to SideStep’s $35 million.

This marks quite a turnaround for SideStep. Two years ago the company was on the ropes. Founding CEO Brian Barth had been ousted. Rob Solomon, previously Yahoo’s SVP Commerce, joined as CEO and replaced 40 of the company’s 50 or so employees. In the last two years he grew the company from $14 million to $35 million in revenue, and turned it profitable. SideStep has raised $32 million in venture capital.

Twenty or so of SideStep’s seventy five employees will stay on at Kayak over the long run. Rob Solomon and a few others will remain for a sixty day transition period and will then be back on the market.

Update 1: Worldwide Comscore numbers for the four companies are below. Kayak says that there is less than 10% overlap between SideStep and Kayak users.

Update 2: I just spoke to the Kayak and Sidestep executive teams for a more complete briefing. The combined company will have 60ish employees once the merger is completed and the 60 day transition period ends. The company is very profitable on the combined revenues. In addition to affiliate fee from sales, SideStep does a large display advertising and email marketing business, which Kayak lacks. Total ticket sales for Kayak are around $2.5 billion/year. SideStep is around $1 billion.

Funny quote from the press release: Kayak’s CTO and cofounder Paul English says “As a native Bostonian, I am also personally gratified to finally see an East Coast technology firm purchasing a West Coast counterpart.” Kayak is Connecticut based; SideStep is in Silicon Valley.

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Social travel network TripUp has announced the launch of CouchSwap, a new social travel application developed specifically for Facebook.

CouchSwap gives Facebook users the ability to offer their couches to friends and other travellers, as well as being able to find available couches offered up by other members.

CouchSwap features include a ratings service that allows users to rate couches like a hotel room, and a credit system for swapping couches. Users must offer a couch in order to take advantage of other people’s couches; a Bartercard style system of sorts for cheap accommodation.

CouchSwap will compete directly with the Couch Surfing Project, a stand alone site that has over 270,000 members.

Counchswap’s parent company TripUp was acquired by Sidestep July 9.

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Travel search company SideStep has acquired social networking site TripUp for an undisclosed sum.

TripUp is a social network focused on travel and includes user-generated travel blogs, photos, videos, maps, and travel reviews.

SideStep had previously acquired user generated hotel ratings site TravelPost.com in October 2006.

I spoke with SideStep CEO Rob Solomon prior to the announcement. Solomon sees the acquisition of TripUp as SideStep moving towards becoming a data intensive network; SideStep wants to become the leader in online travel related information.

Solomon said that SideStep has a social networking strategy in place that as well as utilizing TripUp also includes Facebook.

SideStep already has two Facebook applications. The Trips Facebook application provides a trip planning service that currently has over 150,000 users. Extended Info allows users to add fields and categories of their own choice to a Facebook profile. SideStep is already developing a Facebook App for TripUp that should be launched later in the year.

I pushed Solomon on the question of what SideStep gets out of Facebook, given the still lingering questions over many Facebook apps that seemingly lack any coherent business model. SideStep sees Facebook as a customer acquisition vehicle. Solomon noted that although it is still early days in terms of what they are doing on Facebook, the company had already had over 1000 solid leads from their two Facebook apps, and expect this figure to rise rapidly as they improve their cross promotion strategies.

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