Several years ago, I talked to the CEO of Farecast, an upstart online travel company. However, the company had a unique twist. That is, it leveraged the huge amounts of data in the airline industry to predict the pricing of airfares.

I thought it was a cool idea. And, interestingly enough, so did Microsoft (NASDAQ: MSFT), which recently agreed to purchase the company (the price tag was not disclosed).

Then again, Microsoft had some visibility into the operations of Farecast – since both companies are partners (in MSN.com).

So far, there are few details on the transaction (although, it sounds like we will hear more soon). But, it does show the importance of using data to build companies – essentially, next-generation companies. What's more, with the turmoil in the airline industry, there should be lots of opportunity for online operators.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

There's been lots of dealmaking with online travel portal, Orbitz Worldwide Inc. (NYSE: OWW). Back in 2003, the company went public, and then a year later sold out to Cendant. Cendant then meshed its online travel properties into a new unit, called Travelport, which was then sold to the Blackstone Group (NYSE: BX).

And the dealmaking continued this week as Orbtiz raised a cool $510 million in an IPO. Unfortunately, investors were not impressed. The IPO was priced at $15, which was below its $16-$18 range. The stock then fell 3.3% on its first day of trading.

But the IPO proceeds won't go to Orbtiz. Rather, the cash will flow back to the parent company, Travelport (in a special dividend). In other words, the IPO is really a cash-out -- not a way to help build Orbitz.

True, Orbitz has some nice brands – such as CheapTickets.com and eBookers.com. But the fact is that the online travel space is highly competitive, with players like Expedia Inc. (NASDAQ: EXPE) and Priceline.com Inc. (NASDAQ: PCLN).

Another big issue: the company has never posted net income. So, I can understand why Wall Street has some concerns.

Also check out some of the other IPOs of the past week.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

See also:
Jonathan Berr: The appeal of Expedia and Orbitz eludes me
Tom Taulli: Blackstone wants payback with Orbitz IPO

I don't share my colleague Eric Buscemi's enthusiasm for Expedia Inc. (NASDAQ: EXPE). The second IPO in four years for Orbitz Worldwide Inc. doesn't thrill me either.

Online travel is a commodity business where people's sole loyalty comes from whoever gives them the lowest price. While in theory that's great for consumers, that's lousy for investors. The travel sites are big advertisers because they need to convince people that they are different from one another and that they can offer better bargains then each other and the service providers.

The public is bombarded with a confusing array of advertising about where they can get the best travel deals on the Web. Both Orbitz and Expedia offer $50 travel coupons to people who find better prices online within 24 hours of booking a trip on their sites. Airlines make the same promise as do hotels and car rental companies.

If all of these claims are accurate, why should anyone even bother using Expedia or Orbitz?

I realize travel providers need Expedia and Orbtiz because they can't sell all of their excess inventory themselves.

But is that a good enough reason to invest in either company?

I don't think so.