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Microsoft Acquires Farecast for $115 Million
John Cook is reporting that travel search provider Farecast has been acquired by Microsoft for $115 million. Farecast is a travel prediction engine which attempts to help you find the most ideal time to purchase tickets.
Microsoft says that they will integrate the Farecast techology into MSN Travel. Is that worth $115 million? Cook stated that there were other companies interested in acquiring Farecast — perhaps it was a defensive move by Microsoft. How do you purchase your travel? I’ve always used the provider Web site (and occasionally Priceline) as I am a points and awards maximizer.
In what might be the shortest acquisition post ever, CEO Hugh Crean stated, "This acquisition creates tremendous opportunities for the Farecast team and our customers. We look forward to sharing more details in the weeks to come."
Initial investor Madrona Venture Group noted that the investment returned more than five times the money invested. It was a "very nice financial return for us," Matt McIlwain of Madrona said.
As a side note, our post about Farecast moving into beta in late August 2006 was one of the first pieces of content ever on CN.
IMHO Microsoft is building a series of satellite sites that provide search technology for one vertical or another. Travel is one of the biggest categories of search and Farecast will allow them to differentiate vs. Google. We posted about this over here at our corporate blog:
http://www.uptake.com/blog/travel_industry/farecast-is-microsoft-getting-into-travelor-into-contextual-targeting_253.html
Our perspective is that this a cheap acquisition that has strategic value in staying in the search game vs. Google AND signaling to Yahoo that MSFT can go it alone.
Will MSFT purchase Zillow next?
sorry, link didn’t work. Here it is again:
UpTake.com’s Farecast analysis