Microsoft Corporation has acquired Farecast.com, the first airfare prediction website. The financial terms of the deal were undisclosed, but according to some reports it made up $115 million.
Farecast was Microsoft’s partner on MSN Travel the previous year and now the computer giant is going to deeper cooperate with Farecast for better work and larger profit.
Farecast was founded in 2003 by Oren Etzioni, and has collected over 175 billion airfare observations to date. Farecast's team of data miners use these airfare observations to build algorithms to predict future airfare price movements.
In August 2007 Farecast launched a beta version of its hotel search engine with an innovative "deals" rate key. In May 2007 the company released results of an independent audit verifying Farecast's prediction accuracy at 74.5 percent and also launched additional features such as Farecast Alerts (a notification service that will inform travelers of key price drops) and a flight quality filter that allows travelers to sort flights by type. In February 2007 Farecast introduced Fare Guard, which allows customers to lock-in a specific price for a flight and be protected from future price increases for the following seven days.