My advisor, Oren Etzioni, just had his latest company launch it’s first product publicly. Check out Farecast at www.farecast.com!

The idea is rather simple — study airline pricing and determine if you should buy a ticket now or wait. Right now, it only really works if you’re travelling from Seattle or Boston, but they’re adding cities left and right.

Personally, I give ‘em less than a year before they’re bought by Orbitz, Expedia, or Travelocity. I’m not sure if I’d bank on the prediction model of whether I should buy a ticket now or not, given that if I wait, I might not be able to get the flight I want or end up with a crap seat, just to save something like $10 (and I’m just estimating that based on playing with it… if you can save substantially more, this may be much more interesting, but I’m doubtful things will be that rosy). However, if Expedia / Orbitz / Travelocity could, on average, save $10 per ticket, then they’d just clean up. They buy Farecast, and lower their published prices by $5. Let’s say Expedia buys them. Expedia can now undercut Travelocity and Orbitz with a $5 cheaper ticket — and in a world where people shop by price and have no problems going elsewhere to get a better price on the same ticket, this causes Expedia to win. Plus, for each ticket, Expedia is now getting $5 more — as they’re saving $10 from Farecast. How are they doing that? Well, they’re just going by what Farecast says… buy the ticket now, or wait a bit and buy the ticket later. They just have to eat the occasional higher cost when it is higher, but if Farecast works, then statistics will cause things to win overall, and Expedia (or whomever buys Farecast) will win. Simple as that. And I’m just using $10 as a guess here… if it’s more like $20, it’s an even bigger win and no-brainer.

So, hats off Oren (and Jeff!) and hope things work out. The beta looks great!

This entry was posted 2 years, 6 months ago on Wednesday, June 28th, 2006 at 11:05 pm and is filed under Random. You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.