Early this week, Seattle P-I reported that Farecast, an airfare pricing comparison tool, had been acquired. At the time they said they didn’t know who the buyer was, but the estimated price was $75 million. They were guessing that it was travel company Expedia, but as it turns out, it was actually Microsoft and the price was quite a bit higher than the $75 million they originally reported. According to a source “with knowledge of the deal,” the price was around $115 million! Wow.

On Farecast’s blog, they confirmed that they were acquired and made this statement:

We’re excited to confirm that Farecast has been acquired by Microsoft! This acquisition creates tremendous opportunities for the Farecast team and our customers.  We look forward to sharing more details in the weeks to come.  On behalf of the Farecast team, thank you.

Microsoft has yet to release an official statement, but they did respond to the Seattle P-I and say:

We are pleased to announce that we have acquired Farecast, a Seattle-based smart travel search engine, and we welcome them to the Microsoft family. Farecast has been a partner of ours on MSN Travel and we look forward to working closely with the Farecast team to incorporate and apply its technology in new and interesting ways.

We were pretty impressed with Farecast from the start when they launched their public beta back in May of 2006, and the service has only gotten better. Wikipedia has an interesting note on the company saying that an independent audit found that Farecast’s prediction accuracy was at 74.5 percent which is pretty impressive. Just last August they expanded themselves further and started a beta version of a hotel search engine.

Back in October we wrote about how Microsoft intended to make 20 “smaller” acquisitions each year for the next five years, so Farecast is just one of several that they will purchase this year. As a fan of Farecast, it’ll sure be interesting to see what Microsoft will do with the company and how they will incorporate the technology.