DealBase.com, an online database devoted to aggregating hotel deals and packages, has secured $1 million in Series A funding from angel investors including Russ Siegelman, a partner at Kleiner Perkins Caufield & Byers; Bob Zipp, managing director of Amicus Capital; and Josh Hannah, general partner at Matrix Partners and former CEO of eHow.com.

Launched in November 2008, DealBase crawls the web to create a database of hotel deals, special offers and packages, which currently number more than 22,000 deals, from over 3,500 sources, adding up to $4,660,093 in total savings on the site. The online travel industry is a competitive market chock full of sites that find consumer deals for travel, which makes the popularity contest incredibly tough. Expedia, Kayak, Travelzoo and others all offer packages and deals through their platforms and have a dedicated user base.

What makes DealBase’s site slightly more unique is its “Deal Analyzer” functionality that compares deal prices to regular prices, and then rates the deal for travelers so they can determine if they’re getting a good deal or not. Sam Shank, founder of DealBase, says that 15 percent of deals on the site have negative savings. But Microsoft-owned Farecast, a travel site focused in finding deals for hotels and air travel, also has a feature that measures how well-priced the hotel is compared to its original pricing and other hotels. The main difference is that Farecast doesn’t limit its search to just deals and packages while DealBase only lists deals and special promotions for hotels.

Shank also maintains that since DealBase lets any hotels post advertisements for free, with no advertising deals, the process is transparent and hotels have more of an incentive in the current economy to post a deal for free. Currently, DealBase features over 500 deals for New York City Hotels while Travelzoo lists only 7 deals. Expedia also features nearly 500 deals for hotels in New York. If DealBase’s database has the same reach and information of more established sites like Expedia, that could be a good sign.

Shank’s previous startup, TravelPost, was one of the larger hotel review sites in the US and was acquired by SideStep, a comprehensive travel deal search engine. SideStep was then acquired by competitor Kayak in December 2007 for $180 million.

Browser add-ons are a great, but not everybody uses them. If you want to build a serious Web business, it is probably still a good idea to have a Website as well. Last year, when Tom Romary launched Yapta he didn’t want to compete with all the other established travel Websites out there. So he created Yapta as a browser add-on that allowed travelers to track flight fares at the exact time when they were searching other travel sites for airfares. (See our initial review here).

Now, 350,000 registered users later, Yapta has finally launched as a full-fledged Website, where you can track fares from 23 different airlines, including American, Delta, United, Jet Blue, Virgin America, and many newly added international carriers (Air France, British Airways, Cathay Pacific, Lufthansa). Once you find a flight you like, you can track it, and Yapta will alert you when the price drops. If the price declines after you purchase it, Yapta will help you get a refund or credit from airlines that have lowest guaranteed fare policies (most of them do if you buy directly from the airline, which Yapta helps you do by linking directly to the airline sites).

Unlike Farecast (now owned by Microsoft), Yapta does not make fare predictions. It tracks actual prices and sends you an email alert when the price changes. Says Romary:

Prices are very volatile. What we’ve learned is that the answer to whether it is going up or down is. ‘Yes.’ It is going up and down. People want to know when it happens.

So far, with just its browser add-on, Yapta users have tracked more than one million flights and identified over $60 million in savings. Nearly $50 million of that was identified before purchase, and the rest came in the form of vouchers from the airlines after the fact. Of all the flights tracked, about half (46 percent) saw price drops.

Now that Yapta is a Website, maybe it will be able to grow beyond the niche that it has carved out for itself. If you have time to plan a trip a few weeks out in advance, Yapta can be really handy, especially in conjunction with Farecast which gives you an idea of how low prices on a particular flight might go. Too bad there isn’t an API for Farecast that lets Yapta integrate the prediction feature into its own site, or vice versa.

Rumors about the acquisition of Farecast are accurate – in a very brief blog post CEO Hugh Crean says they’ve been acquired by Microsoft.

SeattlePI, which first broke the rumor last week, says the price tag was $115 million. While the two companies are an understandable fit given their proximity and partnership over MSN Travel, SeattlePI reports that Farecast entertained multiple offers before accepting Microsoft’s.

Farecast is an airfare pricing comparision tool that also uses a predictive algorithm to recommend when you buy your ticket. So the idea is to show the user not just who has the cheapest ticket, but whether or not waiting might make sense as well. The site has also guarantees tickets at its predicted prices for an extra charge. As of this past fall, it also began helping travelers determine the fairness of hotel pricing.

The deal follows the acquisition of competitor SideStep by Kayak in December.

Farecast, which launched in May 2006, tries to predict flight price changes for consumers so they know whether to buy now or wait. In late 2006 they added guarantees, effectively allowing consumers to buy insurance policies against price increases in the event they decide to wait. More recently, Farecast added hotel bookings as well.

The site now offers predictions for over 200 markets between U.S. cities and Europe, Mexico, the Caribbean and Canada. According to USA Today, travelers can search for international trips up to two weeks long and six months out and Farecast will predict whether fares will go up, down or hold steady over the next week.

The new extended service still has limitations, for example a search for San Francisco International (SFO) to London Heathrow (LHR) offers airfares, but doesn’t provide a prediction service despite LHR being a major gateway into Europe, where as SFO to Mexico City now does. Farecast can be used in a similar fashion to general travel sites such as Expedia as a general airfare and booking service; a search for Melbourne (MLB) to SFO gave similar results to the SFO-LHW search, although despite Farecast providing price comparison links to sites including Expedia, there was no price advantage at all over the other sites.

Farecast operates in a highly competitive space, more so since Kayak acquired Sidestep in December. Farecast’s traffic has trended up over the long term, but it is still lagging in third place (see comScore chart below).

(thx to Mark Douglass for the tip)

This is a two part deal. Kayak raised $196 million in a new round of financing from their existing investors (Sequoia Capital, General Catalyst Partners and Accel Partners), two of SideStep’s existing investors (Norwest Venture Partners and Trident Capital), new investors (Oak Investment Partners and Lehman Brothers Venture Partners) and debt lenders (Silicon Valley Bank and Gold Hill Capital). Prior to this new round, Kayak had raised $27 million in capital.

Kayak subsequently acquired SideStep. Terms are not being disclosed, but we are hearing that the deal was for $180 million in cash. An additional $20 million that SideStep holds in cash is being distributed as well, making the total deal size around $200 million.

SideStep and Kayak are the two leaders in the discount travel search space (along with Mobissimo and Farecast). Kayak is reportedly doing around $50 million in yearly revenues, compared to SideStep’s $35 million.

This marks quite a turnaround for SideStep. Two years ago the company was on the ropes. Founding CEO Brian Barth had been ousted. Rob Solomon, previously Yahoo’s SVP Commerce, joined as CEO and replaced 40 of the company’s 50 or so employees. In the last two years he grew the company from $14 million to $35 million in revenue, and turned it profitable. SideStep has raised $32 million in venture capital.

Twenty or so of SideStep’s seventy five employees will stay on at Kayak over the long run. Rob Solomon and a few others will remain for a sixty day transition period and will then be back on the market.

Update 1: Worldwide Comscore numbers for the four companies are below. Kayak says that there is less than 10% overlap between SideStep and Kayak users.

Update 2: I just spoke to the Kayak and Sidestep executive teams for a more complete briefing. The combined company will have 60ish employees once the merger is completed and the 60 day transition period ends. The company is very profitable on the combined revenues. In addition to affiliate fee from sales, SideStep does a large display advertising and email marketing business, which Kayak lacks. Total ticket sales for Kayak are around $2.5 billion/year. SideStep is around $1 billion.

Funny quote from the press release: Kayak’s CTO and cofounder Paul English says “As a native Bostonian, I am also personally gratified to finally see an East Coast technology firm purchasing a West Coast counterpart.” Kayak is Connecticut based; SideStep is in Silicon Valley.

The hotels area of the site helps users see prices based on a number of travel search engines (Orbitz, CheapTickets and ReserveTravel). All the results are shown on a map along with price and other basic information.

But the service also looks at each of the hotels to let you know if it’s priced attractively or not. For most hotels, the star rating isn’t enough to tell if the price is too high or low v. local competition. Over the long run market forces even the playing field, but a traveler unfamiliar with a specific hotel can (and often is) overcharged occasionally. Farecast will help you understand if you are getting a deal or not on that specific hotel.

Hotels with good deals are marked in red. Over priced rooms are blue. Click on the image for a larger view of the interface.

This is much different than their flight business, which is based on helping people predict if airfares will likely increase or decrease before the flight date. But travelers looking for a good hotel at the best price possible will find this equally useful.

1. Before you decide on an airline, take a gander at SeatGuru. It has gobs of information on practically every airline you could possibly imagine. SeatGuru shows handy seating keys that list specific information such as good and poor seats, exits, lavatories, etc.

It also indicates in-flight amenities like audio, video, AC power and Internet. Using SeatGuru, you can quickly examine check-in and baggage rules and gather the other information you need to get your trip in order.

2. Booking early is the single best piece of advice you can have. The question is how early. Using FareCast, you can help dispel some of that mystery. FareCast monitors your travel details are forecasts the best time to purchase your tickets.

It will indicate whether prices are expected to rise or fall and alert you when to buy. FareCast isn’t enabled for every airport yet, but its availability is spreading quickly. I know more than a few people who have had enormous success at getting ridiculously cheap tickets through FareCast.

3. Tthis one is going to be a bit counter-intuitive to the first two tips, but it’s something I swear by. If you frequently fly around the States, use Southwest. Not only does Southwest typically offer some of the lowest prices available, there is a considerable advantage to flying only one airline.

If you enroll in Southwest’s Rapid Rewards program, it takes just eight round-trip flights to get a free flight. Another great thing about Southwest is that there is no assigned seating, which leads us to the next tip…

4. Get e-tickets and check in online. No matter what airline you use, you can get e-tickets. I assume everyone is familiar with this, but for the one or two of you who aren’t, the e-ticket is the best thing to happen to passenger airlines since the jet engine. It removes all of the hassle of keeping track of your ticket, so you don’t have to worry about missing your flight because of a lost pass.

E-tickets also provide the advantage of online check-ins. This is especially important for an airline like Southwest since there is no assigned seats. Check in 24 hours in advance to ensure that you land in seating group A. This will be the difference between that comfy exit seat and that center seat trapped between two morbidly obese people who protrude into your own seat. Also, if you have no bags to check, online check-in can reduce the number of lines you have to wait in. So unless you’re some sort of freak who likes to wait in lines, this is a good thing.

5. Travel light and pack effectively. Let’s face it, you probably never use or wear half of the things you pack. It took me about a million airline miles to come to this fact. I would travel all over and when I returned home, there was always some unworn jeans and shirts at the bottom of my pack.
Those jeans are good for a couple of wears, so you can probably get by with fewer pairs. Fewer jeans means its more likely that you can fit all your stuff in a carry-on and carry-ons means less chance of your bag ending up in Iwo Jima.

It’s also important to remember that it’s still difficult to bring fluids on the plane. There is some weird esoteric rule that states you can bring an randomly defined amount of fluid ounces (seriously it changes from airport to airport) with you, but I’ve never had any lucky hitting the figure. I’ve simply stopped traveling with fluids. When I arrive at my destination, I buy new crap at a drugstore on my way to the hotel and usually I’ve finished it off when it’s time to go home.

6. Last but far from least: While e-tickets and online check-in can significantly reduce your wait time, it’s important to remember that airport regulations are effing crazy. The rules are absolute shenanigans and, as far as I can tell, they’ve been rigorously designed to maximize the time you spend in the airport. Being aware of the screening rules can help you save a lot of time.

Keep in mind that when you go through the metal detector, you’ll have to remove your shoes and belt and take everything from your pockets, so be ready. I’ve gotten my unshoeing and de-belting procedure down to ninja-like precision. Unfortunately it still takes me about 15 minutes to get everything back on, so everyone still bottlenecks behind me. Baby steps, right?

The core service predicts if airline prices will increase or decrease in the near future from the current prices. They added a price guarantee in late 2006 that allows users to pay a $10 fee and lock in the current low price. They can then make a purchase decision later.

This morning, Farecast is launching a new deals feature. Unlike other travel sites, where deals are generally excess inventory being dumped at a low price, Farecast is saying they’ll find particularly good deals based on their analysis of the airline pricing stream which goes through their engine every day. On their home page right now they are showing a $333 ticket from Seattle to Honolulu.

The company has raised just over $20 million in capital.

The company has now raised $20.6 million over three rounds. How are they doing? The model seems to be attractive to consumers. Farecast VP Marketing says in just the last few months since launch they’ve “dropped off $200 million in “potential” revenue to airline websites,” a fraction of which will have resulted in actual sales.

Farecast is a service that predicts airline pricing in the future (U.S. domestic market only), helping customers decide if they should purchase a flight now, or wait. They’ve been testing a product which allows users to lock in a price found on the site for up to a week. For $10, customers will be protected against any price increases for that flight. This is, effectively, the purchase of an insurance policy against the risk of future price increases.

They have a detailed description of how it works, and how they mitigate their risk, on the Farecast blog.

We’ve liked Farecast since we first covered them, but note that some of the most competitive airlines, including SouthWest, don’t allow services like Farecast to access their flight data and sell tickets. We recommend using Farecast and other sties to look for exceptional deals, and then compare those prices to SouthWest and other discount airlines to determine the best ticket for them.

Farecast uses millions of observations of past airfare prices to predict whether a ticket price between two cities for a particular date is expected to decline or increase in price over the next seven days. If the price is expected to go up, then Farecast recommends that you buy your ticket now. If it is expected to go down, then the service recommends that you wait for a lower price. The company currently offers predictions for flights originating in 75 US cities.

The company says that it is correct in its predictions about 70 to 75% of the time. If Farecast tells you a ticket’s price is going to drop and recommends that you wait, you can pay the Fare Guard fee to lock in access to the lowest price of that day for the next week. If you have purchased Fare Guard and the price instead goes up, Farecast will send you the difference between what you ended up having to pay and the price you locked in with them. If Farecast’s prediction was correct and the price does drop, you can buy the ticket at the lower price and they make $10 from the Fare Guard service.

This is just the first of several value added products the company says it hopes to offer as revenue generation beyond lead generation and contextual advertising. To test out the Fare Guard product, follow this link and login as username “techcrunch” password “fareguardtest.” See also our previous coverage of Farecast.

Will Fare Guard be a success with consumers? It may be a little difficult to explain clearly, particularly given that it’s only one way movement that will be guarded against. If Farecast predicts that a ticket price is going to go up, so I buy at the current price, and in fact the price goes down – Fare Guard does not offer to compensate me for the money I could have saved if I had ignored Farecast’s recommendation. That, according to the company, would be yet another product and this current one needs to be tested first. The current product will probably be much easier for users to understand than it is to explain in the abstract, sometimes you’ll be offered Fair Guard protection and sometimes you won’t. It’s fascinating to see what kinds of value added “products” can be placed on top of data mining.

Farecast received $8.5 million in funding from Greylock Partners, Madrona Venture Group and WRF Capital. Development and testing of the site has taken 3 years. The site was named by Time Magazine as one of the 50 coolest sites on the web this year. It’s a real crowd pleaser and I’m sure many people will be interested in trying their services out now that they’ve extended their reach.

The RSS feeds mean you can test it out yourself very easily; I’ve subscribed to a search for fares from Portland, Oregon to Austin, Texas leaving and returning middle of next month. I’ll keep an eye on the feed and see if it does anything more interesting than go up two weeks before my supposed departure date. I expect in many cases it will – but it should be easy to verify with time.

The company showed me around the site last week and it looks really useful. The primary upgrade from the private beta is the addition of ajax, making the functionality all the smoother.

The main brain behind Farecast is Oren Etzioni, the head of the University of Washington Computer Science Department’s Turing Center and the founder of search engine MetaCrawler. With $8.5 million in funding from Greylock Partners, Madrona Venture Group and WRF Capital, Farecast development and testing has taken 3 years. The company told me that about 20% of its staff of 22 are data miners or Phd scientists.

Users select departure and destination along with flight dates, then are shown a graph of past ticket costs, a prediction of the next week’s likely price shifts and a percentage of confidence in the prediction. Tickets are then purchased direct from the airlines, except when multiple vendors are to be used, at which point Farecast works with Orbitz. Advertising contextual to your search will be displayed near the results.

It’s nice to see data mining applied to more than watching you and me, for a change. Presumably this kind of technology could have any number of different applications and systems like this are already used to cut down on industrial inefficiencies I’m sure. Whether a new world of consumer facing data mining applications is responded to favorably by industry or whether they see it as a loss of leverage over consumers seems to be a key question.

Indeed, questions have been raised about whether airlines would approve of such a system; at least some say they like the fact that the purchases are direct from them instead of through a costly third party. Other people have said that the airlines will just change their price patterns if the system proves successful in predicting price dips. Farecast seems determined to have an amiable relationship with airlines and it will be interesting to see if they succeed.

Mike reviewed Farecast when it went into private beta; he complained that SouthWest wasn’t included and always has the best prices. SouthWest doesn’t open their prices to anyone and Farecast does include Southwest schedules in their search results – so it seems they are doing their best. Whether it matters remains to be seen.

I know I tend to buy plane tickets without enough research, so I’ll be checking Farecast and it’s 60 billion plus observations, though of course I’ll check elsewhere as well. If the company’s data is consistently verified by my anecdotal experience then I’ll be back for more. Hopefully Portland will be added to the list soon.

The site is well designed and the interface clearly communicates pricing and predictive information. At this point in the beta you must choose Seattle or Boston as the departure city, so I looked at Seattle – Los Angeles flights. The cheapest option was $329 (on American Airlines), and Farecast tells me with 80% certainty that the lowest fares will rise by $50 over the next seven days.

Ok, great. But Southwest, which has flights for $308 round trip, isn’t included in the price comparison. And that’s the real problem here. Farecast is a nice solution that distills useful information from complete pricing chaos by the airlines. But Southwest doesn’t play those games, and doesn’t open their service up to comparison engines like Farecast. So the lowest and most understandable prices are excluded from the service.

While I like Farecast, and will use it to see if I can get a flight for less than Southwest charges, what I’d really like to see is our airlines pull their collective head out of their collective ass and adopt a pricing model that makes sense. One, for instance, that doesn’t require a proprietary algorithm like Farecast’s to understand.

John Cook has more. Sign up on the home page for a private beta invitation. Thanks Noah for the invitation.