Microsoft acquires travel site Farecast

By Ed Oswald | Published April 18, 2008, 2:51 PM

After having exited the travel business once before by spinning off Expedia, the Redmond company appears to stepping back in by scooping up a Washington-based startup.

Farecast is not exactly like Expedia, or other travel sites for that matter. Instead it essentially provides forecasts of whether fares would rise or fall on a specific route. From there, it provides a recommendation of whether to buy the ticket now or wait.

Microsoft had already been working with the site, having signed a partnership last summer to provide its fare forecasting data on MSN Travel. Although neither side is disclosing how much the deal was worth, it is estimated to be in the neighborhood of $115 million.

"We're excited to confirm that Farecast has been acquired by Microsoft," CEO Hugh Crean said. "This acquisition creates tremendous opportunities for the Farecast team and our customers." He said more details would be provided in the coming weeks.

A spokesperson for Microsoft also confirmed the merger. The Seattle Post-Intelligencer also reported that the company had received multiple offers, and that the deal brought a five-fold return to its investors.

Expedia was spun off in 2001 to stave off antitrust concerns, among other reasons. Although the company did link into the travel site's catalog for quite a few years, and still does rather prominently through its MSN Travel site, that partnership has faded away somewhat.

It is not immediately clear how the Farecast buy would change MSN's travel services, if at all.