The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( Trefis) -- Microsoft's ( MSFT - Get Report) Bing has recently added a new feature called Price Predictors to its travel searches, which automatically suggests flights based on the best airfares. It also suggests if one should buy now or hold off for a better fare based on how fares are trending. We believe this will have an impact on companies like Expedia ( EXPE - Get Report), the largest U.S. online travel agency by booking volumes, and challenge Google's ( GOOG - Get Report) move into travel search. We have a $31.66 price estimate for Microsoft, which is about 23% ahead of the current market price. Bing's new feature makes travel searches even quicker and more convenient than what's available elsewhere by suggesting a best price deal based on flexible dates and times for travel. If one searches "flights to Boston," this service will offer the best prices on flights from your current location. For more specific searches, one can specify date and location and then look across 100+ to find the best deal, similar to what other aggregator sites do. This includes a chart that shows how fares trend through the date range specified so a user knows when the cheapest time to travel is. Google's search lacks the suggested travel option and so takes more steps to find the best deals for travelers.
Air ticket bookings make up less than 10% of our $29.12 Trefis price estimate of Expedia's stock. Given the low revenue margin on air ticket bookings, we see a small impact on Expedia's cash flows if Bing Travel takes off. However, the reduction in the number of visitors could also impact revenue from advertising on Expedia's websites, which currently make up over 3% of Expedia's stock. You can see a detailed analysis of our $29.12 Trefis price estimate of Expedia's stock here. Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.