Oren Etzioni

When Microsoft bought Seattle online travel startup Farecast for $115 million more than a year ago, some people in the technology industry wondered why. The reason is now clear, with Farecast's technology on full display in the software giant's new search engine, Bing.com.

The newly launched Bing Travel -- which combines Farecast's airfare-prediction and travel-search tools with MSN editorial content -- is a key chess piece in Microsoft's new effort to challenge Google in Internet search. It makes Microsoft a bigger player in the online travel market, which has long been dominated by another company with historic ties to the Redmond company: Bellevue-based Expedia.

It's also a high-profile example of Microsoft benefiting from technology developed in its backyard. Oren Etzioni, the University of Washington computer scientist who founded Farecast in 2003, is watching with pride. Etzioni said he's happy to see his idea end up with a bang, not a whimper, to paraphrase poet T.S. Eliot.

"In this case, it's a Bing -- but close enough," Etzioni said.

Bing Travel, at bing.com/travel, offers a new starting point for people seeking to book flights, hotels and other travel items. Bing Travel's search results pages pull together information from various sites to display fight details, fares and other key information -- reducing the amount of time people need to spend on airline or online travel sites.

However, to book a flight or another travel item, users still need to click through to an airline or travel site.

That makes Bing Travel both a rival and a partner to existing travel sites -- competing for the initial search traffic, but ultimately delivering business to those sites. Bing Travel aims to attract consumers by providing a central place to sort through flights and deals from a number of sites, said Hugh Crean, the Bing Travel general manager, who was Farecast's chief executive.

"As the competition has emerged, the need of the consumer has evolved from just needing the ability to press a button and search the options within an agency to have the ability to search across the marketplace efficiently," said the 37-year-old executive.

Crean

In that way, Bing Travel is different from Expedia, which Microsoft incubated in the mid-1990s before spinning it off in a 1999 initial public offering.

"When you shop on Expedia, which is a fantastic brand and the leader in the online travel space, you are shopping at a travel agency that, in a lot of ways, is no different than any other travel agent you might walk in the front door of," Crean said. "What Farecast was -- and Bing Travel is now -- is a travel search experience."

But it isn't a traditional search experience, which would provide people links and quickly send them to the related site. Instead, Bing Travel and other Bing features are putting detailed information into the search results themselves -- increasing the amount of time that people spend on Bing, and boosting the chances that they'll click on a related advertisement on the site.

"In general, they’re trying to make Bing more of a destination and less of a typical search engine," said Matt Rosoff, an analyst at the Kirkland-based Directions on Microsoft research firm.

Bing, unveiled May 28, is Microsoft’s latest effort to chip away at Google’s lead in the Internet search business. Prior to Bing’s release, Microsoft had slightly more than 8 percent of U.S. search queries, compared with Google’s nearly 65 percent, according to the comScore Networks research firm.

Crean acknowledged that some people originally questioned why Microsoft would get serious about the travel space with the Farecast deal. So far, he said, the integration of Farecast has gone well.

"When we sat down over a year ago and heard the vision of what was trying to be accomplished, it really did match up very well with what our passion was within travel," he said. "It has been exciting for everyone on the team, and obviously extremely energizing to be a part of it."

UW’s Etzioni, who sold his interest in Farecast as part of the Microsoft acquisition, said the Redmond company was wise to keep Crean and his team on board to run Bing Travel. Microsoft seems to recognize the "tremendous talent" that came along with the Farecast acquisition, Etzioni said.

At this point, members of the original Farecast team continue to work from offices in Seattle's lower Queen Anne neighborhood. But that will change this summer when they move to downtown Bellevue to be closer to the rest of the Bing search team.

Crean declined to say how many people are working at Bing Travel, but he said the unit has integrated employees from MSN Travel and other parts of Microsoft over the past year. The Bing Travel unit also has been able to draw on Microsoft's resources to invest more in the core technology, he said.

Another benefit, Crean said, has been the ability to tap into the resources of Microsoft to make a deeper push into the travel space. One example is the integration of Bing Travel results into general searches conducted through Microsoft's new search engine.

Now, consumers searching for "Seattle to San Francisco flights" or other travel related information on Bing.com can easily find a Web page with airfare predictions, historical pricing and other information.

Crean says it's all part of the strategy to capture consumers "higher in the funnel" so they can find the travel information they're seeking faster and more efficiently.