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, my prediction of less than a year (meaning a purchase by July 2007) was off by a year. But you should know by now how accurate my predictions are. 
The more interesting question here is: Why Microsoft? Not clear (and of course the parties aren’t going to comment much until everything is settled). It appears that it’s mostly for the MSN Travel side of the house… which to me seems somewhat suspect given I don’t see why MSN Travel would push for $115MM unless they’re thinking of doing Expedia II. But perhaps they are! I’m also not sure if this is a search play… certainly searching for tickets is a great and interesting concept on a search engine, but knowing if a price will go up / down seems like a very minor feature on a search engine compared to how it could be used in the actual purchase.
But, let’s get to the important business, which is congratulations for Oren and Jeff among other people there. Great work all around, and it’s fantastic to see another successful startup!