The Farecast travel search engine, acquired by Microsoft in April, has edged out Orbitz and become the sole air-search option on MSN.com.
It is the first time that one of the major portals has decided to use a metasearch engine as its exclusive air-search option. (Yahoo Travel users can use the FareChase metasearch tool but get the Travelocity booking engine as a default option.)
Farecast compares fares on multiple websites and predicts fare trends.
Here's the tangled background on MSN's elevation of Farecast: Until early summer, MSN used Expedia as its travel provider. In July, MSN switched to Orbitz to power air, car, hotel and vacation packages. Now with Farecast assuming responsibility for air search, Orbitz has been relegated to hotels, cars, packages and cruises on MSN.
So Orbitz loses a lot of transaction revenue that instead goes directly to Microsoft through its Farecast unit. The move also gives Farecast a more prominent platform to pursue advertising revenue via facilitated search and other ad vehicles.
There is a facilitated-search option at the bottom Farecast's search engine, which consumers can choose to search through Priceline, Expedia and/or Hotwire separately. Some companies prefer search engines opening in separate windows, or placing text ads, because their fares aren't compared with rivals' in a single grid. Thus, Priceline, Expedia and Hotwire compensate Farecast every time a consumer clicks on their search engine or a sponsored ad.
MSN's elevation of Farecast to the king of air searches on MSN.com isn't a total loss for Orbitz, because Orbitz has a preferred relationship with Farecast. When consumers search for flights using Farecast and see results for US Airways flights, for instance, they have the choice to book the trip on USAirways.com or Orbitz.com. But Orbitz is at a disadvantage because Orbitz charges a booking fee of about $6 and the airlines don't.
Orbitz Worldwide spokesman Brian Hoyt said the company knew in July that Farecast would be integrated into MSN.com and pointed out that Orbitz has a preferred relationship with Farecast and powers much of the other travel offerings on MSN.com.
Hoyt said MSN chose to partner with Orbitz because of Orbitz Price Assurance, a service that sends refunds to consumers if the Orbitz price for their flight drops before departure, and because of TLC, a service that alerts travelers about gate changes and flight cancellations.