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CommentFriday, April 18, 2008

Farecast Wings Its Way To Microsoft

Price may have been up to $115 million
Airfare predictions site Farecast announced its rumored acquisition by another firm took place, with Microsoft buying the site.

Farecast had a little surprise for people waiting to see who opened the checkbook and picked up the business. Microsoft partnered with Farecast for its travel site on MSN previously.

On the Farecast blog, CEO Hugh Crean confirmed Microsoft bought the company. "We look forward to sharing more details in the weeks to come," he said.

As is customary for the purchase of a private company, Microsoft and Farecast did not disclose the purchase price. However, John Cook cited a price range of $75 million to $115 million; the higher figure seems less likely.

If interest in Farecast came from Google and Expedia while Microsoft sought to buy them, as Cook suggested, Microsoft probably paid a mild premium to keep the company out of their hands.

Farecast's backers enjoyed some good fortune in a time when economic forces might have conspired to thwart such an acquisition. Though even a high bid of $115 million would be monopoly money to Microsoft, the company still has a potential Yahoo purchase in the works.

Oil prices and a weak dollar mean airfares will probably run high during the busy summer travel season. We have to wonder how effective Farecast will be over the next few months. If jet fuel costs continue to rise, there won't be many downward trends in airfare for Farecast to detect.

News Tags: Farecast, Microsoft, Deals, travel

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