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Friday, April 18, 2008

Microsoft Buys Farecast For $115,000,000

Microsoft has purchased the innovative travel service "Farecast" for a reported $115,000,000. SeattlePI has more about this breaking story. Farecast uses a predictive algorithm to help users determine if airline ticket pricing is poised to go up or down from the current levels and thus helps to find bargain pricing online.

Rather than develop extensive "Web 2.0" features internally, it is becoming very clear that Microsoft is trying to fuel their massive new web initiative with cash, buying companies like Farecast (and Yahoo) that can make Microsoft an immediate player in the rapidly evolving online environment.

Disclosure: Long on YHOO

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2 Comments:

Anonymous Daya Baran said...

That is 6x for the VCs on their investment. I guess this was the best deal they could get. The space is so competitive that if farecast could not ramp up to huge volumes they would be practically worthless. Also there are not many players willing or can pay that amount.

11:32 AM  
Blogger Elliott Ng said...

This is all about Search and Contextual Targeting, not Travel. Agree that this could represent the beginning of more acquisitions to compete against Google. Especially if Yahoo! deal falls through. Our post here:
UpTake.com opinion about Farecast deal

1:06 PM  

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