VentureBeat

Microsoft has acquired travel website Farecast for a rumored $115 million. The Seattle startup’s technology will likely be incorporated into the software giant’s site MSN Travel — even before the deal, Farecast had already partnered with MSN.

Farecast’s technology made it a pretty tempting target for acquisition. As we noted a year ago, the Seattle startup owns its niche of predicting airfares. At the time, we also said that some of the big tech players wanted to increase their presence in the market — looks like we were right, and that this course of events has worked out pretty well for Farecast.

There’s definitely been a lot of money pumped into online travel. For example, travel search engine Kayak raised $196 million and purchased rival site Sidestep for $193 million last December. Also, as we reported this morning, online travel organization site TripIt just received a fresh $5.1 million round of funding.

We’re getting the $115 million price tag from an article by Seattle Post-Intelligencer reporter John Cook, who cites an unnamed source. Earlier this week, he reported that a “secret buyer” wanted to acquire Farecast for more than $75 million. In an interview with Cook, investor Matt McIlwain of the Madrona Venture Group says Farecast received multiple offers, and he calls the deal a “home run”. No wonder — Farecast was funded for a total of $20 million from Madrona, Par Capital Management, Greylock Partners and others.

Chief executive Hugh Crean confirms the deal but offers few details here.

Here’s the latest action:

Mobile enthusiast gives up on “mobile web” – Russell Beattie, a Silicon Valley developer and mobile enthusiast who spent two years working at Yahoo Mobile before launching a start-up called Mowser, has given up on the mobile sector. He writes: “The general answer is that I don’t actually believe in the ‘Mobile Web’ anymore, and therefore am less inclined to spend time and effort in a market I think is limited at best, and dying at worst. I’m talking specifically about sites that are geared 100% towards mobile phones and have little to no PC web presence. Two years ago I was convinced that the mobile web would continue to evolve in the West to mimic what was happening in countries like Japan and Korea, but it hasn’t happened, and now I’m sure it isn’t going to.” Mowser focused on adapting content for mobile phones. Beattie said the expected traffic never came. His story is a cold shower for industry players hoping advances by the iPhone and the Android will inject life into the sector.

Credit crunch hits cleantech after all — Despite some crowing from the clean-technology crowd that the credit crunch hadn’t hit it, it did eat into one a that sector clean-technology companies: private equity investment. Earth2Tech has a good wrapup of the numbers and commentary.

Silicon Valley’s giants are fine, but maybe not for long — The big tech companies of Silicon Valley, on the other hand, are humming along as if the current (probable) recession weren’t even taking place, says the San Jose Mercury News in its annual SV150 issue. The reason: Their international business divisions are going strong. However, the New York Times reports that housing markets worldwide are following the US market’s tailspin, so credit and spending abroad could suffer as well, challenging even multinational companies.

Feed your tank, starve a poor person — Biofuels have pushed back the fight against poverty by seven years and may continue to hurt poor people, according to a quote from World Bank president Robert Zoellick in the Guardian. The tapping of biofuels for alternative energy has faced a growing negative reaction, because it is sending food prices soaring around the world. Biofuels are made from food crops like corn and sugar, and so are taking away from the food stock. The effect, at least for the moment, will probably be limited to more cautious government subsidization policies.

Farecast rumored sold for over $75M — Online travel search site Farecast may have been sold for over $75 million, according to John Cook of the Seattle PI. He’s not sure who the buyer is, but speculates that Expedia would be a likely match since two major competitors, SideStep and Kayak, merged last year. Farecast has done well with its feature that lets you predict whether fares are going up or down in the near future, helping you decide when to buy.

Radio One buys Community Connect for $38M — Media giant Radio One has laid down $38 million for Community Connect, which operates niche sites based on ethnicity, religion and sexual orientation. The company had taken funding from Dominion Ventures, ConnectCapital, Comcast Interactive Capital and Jump Ventures, according to peHUB.

YouTube dominates video, while Google roars in search — YouTube boasted 73.18 percent of all U.S. visits among a group of 68 online video websites in March, according to Hitwise. MySpaceTV received the second highest percentage of visits, with 9.21 percent followed by Google Video with 4.06 percent. YouTube dominates video more than Google dominates search. But then search makes much more money. Google got 67.3 percent market share for search, and that’s a high, while Yahoo and Microsoft hit new lows.

Gawker media cuts Wonkette and others loose — Gawker owner Nick Denton tells Silicon Alley Insider that as the economy stumbles, he’s ditching three “underperforming” Gawker sites: Wonkette, Gridskipper and Idolator, which will all continue under new ownership. That leaves the company to focus on its 12 “core titles,” like Silicon Valley’s beloved gossip blog Valleywag.

Google App Engine and Amazon web services, together at last — When Google launched its Engine App a week ago, allowing developers to build and deploy web applications on Google infrastructure, the move was widely seen as a move against Amazon’s web services. But just because they’re competing products doesn’t mean they can’t work together, as Portland entrepreneur Chris Anderson has shown by creating AppDrop, which allows you to build apps with Google’s software development kit and deploy in Amazon’s Elastic Compute Cloud. There have been complaints that Google Engine App locks in your applications, but AppDrop shows that isn’t quite true.

LiveUniverse reportedly acquires home page service Pageflakes — LiveUniverse, the online entertainment network run by former MySpace executive Brad Greenspan, has acquired the Ajax home page service Pageflakes, according to TechCrunch’s unidentified sources. Just a few hours earlier, GigaOM reported that Pageflakes was “desperately” seeking a buyer. Last February, a number of sites said that LiveUniverse purchased video site Revver, so the network appears to be in an acquisitive mood.

Farecast.com, the young Seattle start-up that now owns the niche of predicting airfares, and which continues to roll out new features (like letting you guarantee low fares), has raised $12.1 million more.

The round was led by Sutter Hill Ventures, and includes PAR Capital Management, Pinnacle Ventures, and Farecast board member and former Expedia CEO, Erik Blachford. Existing investors, Greylock Partners, Madrona Venture Group, and WRF Capital also participated — it has raised a total of $20.6 million. VP of Marketing Mike Fridgen told VentureBeat earlier today the funds are to help expand the team.

Indeed, this is a lot of cash, but it helps the company keep ahead in an area where some big players may eventually become eager to move.

Farecast, the web site which lets you see if airfares are headed lower or higher, has introduced a new, useful feature: A way to lock into a low price.

VentureBeat reported on the company’s test of this feature two months ago. Tomorrow (Monday) it is being rolled out publicly.

To repeat our example: Let’s say you’re planning a trip, say to Kansas on Dec 5, and Farecast shows a low price of $210 and further, predicts prices are going to drop over the next few days.

Now, rather than waiting, you can buy something called a “Fare Guard,” which lets you lock into any subsequent price drop automatically. Initially, the product will come at a promotional price of $3 through Feb. 1, but later will be priced around $9.95, Farecast tells VentureBeat.

Update: The New York Times has also just published a story on this.

Farecast, the web site which lets you see if airfares are headed lower or higher, has introduced another very useful feature: A way to lock into a low price.

VentureBeat is one of the few places you can try this out (see details below).

Let’s say you’re planning a trip, say to Kansas on Dec 5, and Farecast shows a low price of $210 and further, predicts prices are going to drop over the next few days.

Now, rather than waiting, you can buy something called a “Fare Guard,” which lets you lock into any subsequent price drop automatically. Initially, the product will come at a promotional price of $1, but later might be priced around $10. Once you buy the Fare Guard, you have seven days to buy the actual ticket. If the price does drop, you get your savings. If it goes up, unexpectedly, you can buy the ticket, and Farecast will refund you the difference — so you win either way.

Farecast VP of marketing Mike Fridgen said the company is offering the service because it is confident about its own predictive skills. He notes that no other travel service offers such a service.

For now, Farecast is publicizing the limited test through three news sites, with VentureBeat being one of them.

VentureBeat readers can go to the FareGuard promo site.

You can access it with the following login:

username:venturebeat
password:fareguardtest

This company is quickly becoming the Zillow of the airline ticket industry — shaking things up in a large industry by doing things very differently. Fridgen says the site also wants to introduce a “Schmuck Guard” down the line, which would let you guard your price when Farecast predicts prices are going up. This way, you buy your ticket, and if they go down, Farecast would pay you the difference. Here’s our previous coverage of the company.

Updated

Farecast, the start-up that predicts whether airfares are about to go up or down (earlier coverage here), has expanded predictions for 20 more airport destinations, bringing the total to 75 airports.

Until now, Farecast has offered airfare search results for only those destinations where it offers fare predictions. On Monday, it launches airfare search results for all airports in the U.S.

This area of forecasting is a tough one, because the airline industry makes so many changes to its prices all the time.

We asked a few questions of Farecast’s VP of Marketing, Mike Fridgen, and here are a few things we learned about how Farecast deals with the complexity. Airlines issue raw data some eight times a day, and tens of thousands of fares can change that many times a day, making it difficult to keep up with fares. Farecast has invested a lot into its database, but it is still limited in what it can do. It manages, Fridgen says, by looking out a maximum of 90 days out into the future. Most leisure trips are two to eight days in length, and so Farecast predicts fare prices for two-to-eight day trip. If you are booking travel more than 90 days out, or if your trip is longer than eight days, Farecast isn’t relevant.

Still, only 20 percent of all trips fall into this category, so Farecast is a useful tool for 80 percent of all trips.