The Seattle-Search.com Blog

Travel search site Farecast was rumored to be a takeover target recently and  CEO Hugh Crean has confirmed that the site has indeed been acquired by Microsoft. TechCrunch, citing John Cook at the Seattle PI, says the deal was worth something in the $100-$115 million range.Microsoft has a long history in travel, having started Expedia in the mid-1990s (it was sold to IAC’s predecessor USANetworks in 1999). Farecast’s claim to differentiation was that it could predict whether air fares or hotel prices were going up or down to help travelers know when to buy. The site has been around for about two years.

The capabilities are already present on MSN travel and we’ll likely see it affect travel-related search results on Live Search.

Search engines like Google, Yahoo, Ask.com and Microsoft’s Live are the primary driver of traffic to e-tailers. According to Hitwise analyst Bill Tancer, search engines account for 25% of the upstream traffic. That means 25% of the traffic that go to the more than 19,000 online retailers visit search engines first!

Even big-brand retailers rely on search engines for traffic. About 12% of Wal-Mart.com traffic visited Google first, according to Hitwise. But here’s an interesting change and trend Tancer has spotted. Social networks, such as News Corp’s MySpace, are starting to drive traffic to retailers as well. In fact, 5% of traffic to retailers comes from social networks, with MySpace accounting for 2.5% of that traffic.