When Oren Etzioni, a computer science and engineering professor at the University of Washington, discovered that the passenger sitting next to him had paid about $70 less for the exact same flight — even though that ticket had been purchased later — his mind immediately began racing.
“My family and I were on our way to my brother’s wedding,” he recalled. “Since there were four of us traveling, the total amount we’d spent on airfare was significant.”
That frustrating moment sparked a powerful question: could data-mining technology predict the best time to buy airline tickets at the lowest possible price?
Determined to find an answer, Etzioni began researching airfare pricing patterns. Before long, his personal annoyance evolved into a business idea. The company was first called Hamlet — a nod to the famous dilemma, “To buy or not to buy.” Eventually, the name was changed to Farecast to better reflect its mission of forecasting airline ticket prices.
The concept quickly gained traction. Farecast attracted more than $8.5 million in venture capital funding, analyzed over 150 billion price observations, and built a team of more than 20 employees in Seattle. By late 2006, it was covering 75 airports and 2,000 market combinations.
After launching in June 2006, Farecast.com rapidly gained popularity, drawing more than 1.5 million unique visitors during its initial beta phase.
In 2008, Microsoft acquired Farecast for $115 million. On June 3, 2009, Microsoft rebranded Live Search Farecast as Bing Travel as part of its broader effort to establish the Bing search brand. Although the airfare prediction tool remained a key feature, most users still primarily visited for flight price forecasts, while Google continued to dominate the overall search market.
In January 2014, Microsoft removed the airfare prediction feature — once Farecast’s signature innovation — from Bing Travel. With that decision, Microsoft arguably squandered an opportunity to become a major force in the online travel industry.