FareCast XP

Just remember readers - You didn't read it first at the Seattle PI, You didn't read it at CNN, You didn't read it at MSNBC - But you did read this prediction at FMV !!

It's official: Microsoft is the mystery buyer of FareCast... Microsoft did not confirm the purchase price, but a source says the figure is in the $100 million range.

Looks like the price tag has increased from the previously reported $75 million. Screw drinks - DINNER is now on you guys!

Congrats to the FareCast crew.

FareCast = "He Gone"

Way back in December, when SideStep got taken out by Kayak - FMV posed this nugget of wisdom:

It’ll also be interesting to see what happens now with FareCast and Mobissimo.

Well, it looks like our crystal ball rocks because FareCast just got purchased for $75 million - but here's the wierd part - Buyer unknown:

"Farecast has been sold in a deal that values the Seattle online travel search startup at more than $75 million, according to a source with knowledge of the situation. The buyer was not known and Farecast Chief Executive Hugh Crean declined to comment. "

The rumor getting the most play is that Expedia ponied up the cash to purchase the local site - but to FMV, this seems like an expensive proposition for a million visitors or so a month. Also - doesn't seem like their fare prediction algorithim would mesh for the largest OTA on the block.

Who else then? The only other name we can think of would be MSN - simply because they already have a relationship, they are local, they are always looking for unique content to drive their travel site, and who knows how long they will keep their expedia relationship. It'll be interesting to find out...

But otherwise - congrats to the Farecast crew, not a bad run to clear $50 million or so! Drinks on you guys if we ever meet. Not the kind with cream and sugar. Only so we can stay clear of the Starbucks vs. DD dilemma, of course.

Fare Enough to Buy

Uggg...

The dreaded “SDC” – Second Day of Conference. Actually – for Phocuswright, it was actually the "Dreaded Third Day" because they had some other lame pre-Phocuswright session that many people also went to.

The highlight for FMV was the FareCast session where Hugh Crean presented some interesting facts and characteristics:

* Farecast has 5 different suggestions for customers when they look at fares, and it turns out that they will recommend that a customer “Buy” their flight 85% of the time...

* Although customers can search Orbitz, Travelocity, Hotwire, Expedia and other Online Travel Agents – FareCast still sends a customer to an airline website 85% of the time. Honestly – we really can’t understand that those other 15% of the people are doing – unless it’s some sort of multi-carrier flight.

* It turns out that FareCast is correct in their prediction approximately 75% of the time, citing an audit that sampled 44,000 quotes.

Question: Is 75% accuracy good? Especially given the fact that you would predict a Buy 85% of the time. Fares going up is the default - therefore FMV things the REAL guage of accuracy is what percentage of the time can you predict that the airfare will go DOWN.

Hugh repeatedly says that Farecast is data-driven, not marketing driven. FMV likes that they are pretty much trying to tackle the most relevant problem of the traveler “when should I buy a ticket?”. However, what would be the difference if you had a site that just said “buy” every time?