The Next YouTubes

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Will Farecast soon land in the lap of Expedia or Travelocity? Etzioni and CEO Hugh Crean insist that they are building an independent company that can earn profits on ads (for hotel rooms, for instance) and by taking a cut of tickets bought through links on the site. But Etzioni admits the chances Farecast will end up in the hands of a Web giant within five years or so are about 50-50. CNBC pundit Jim Cramer scoffs at start-ups like Farecast as sizzle without substance. "It's like, so what? I could do that company," he says. Among Farecast's formidable Web 2.0 competitors is Kayak.com another rapidly growing travel search site with an even more muscular fare-comparison tool.

AMASS AN AUDIENCE

Just down the street from Farecast's Seattle offices, Zillow.com has generated growing buzz since it debuted last February. It offers free, instant valuations of 67 million U.S. homes. The site says most of its "Zestimates" are within 10% of the eventual selling price. Of the site's 3 million-- plus monthly visitors, more than half are repeat customers, and 54% plan to buy or sell a home within two years.

Zillow's buyers and sellers, on the cusp of a major transaction, would be a gold mine for Yahoo! or Google, either of which could capitalize on the lucrative real estate ad space. Founder and CEO Rich Barton, who made a fortune creating Expedia, concedes that Zillow has had lots of conversations with the big Web players but says he's not selling.

He can afford not to. "The first millions in seed capital came from myself and the other founders," Barton says. "We're in a position to be really patient. Nobody's come and made us a hard offer because they know I'm not interested in selling and I don't need the money." He does takes his work home, though. With guidance from Zillow, he is selling his house; it's yours for $2.9 million.

Zillow has partnership agreements with Microsoft (for satellite imagery), Yahoo! (for links on the portal's real estate site) and Google (for ads). That could set the stage for a longer-term deal--or an acquisition--down the road. Meanwhile, to tame the chaos characteristic of early start-ups, Barton has set some limits. "We have foosball and air-hockey tables," he says, "but we don't have dogs running around."

COMMUNITY=CASH

At yelp, on the other hand, founder Jeremy Stoppelman's dog Darwin romps freely around the cubicleless San Francisco office. Like YouTube, Yelp.com was started by two former PayPal whizzes in their 20s. Last month 1.5 million people visited their fledgling site to share information about local businesses in 25 major cities. Volunteer reviewers, or Yelpers, read and write about restaurants, stores and services. Yelp's founders say they were inspired by their frustration in trying to find good doctor recommendations online. Their idea was to improve on existing tools like Citysearch, which Yelp's founders call the old dog.

In building its community of reviewers, Yelp is hoping for a MySpace-like allegiance to the site's content and personalities. There's also the $15 billion that companies spend annually on local Yellow Page ads nationally to motivate their efforts. "Most local businesses--whether veterinarians, massage parlors, spas or restaurants--aren't buying Google key-words," says Peter Fenton, a partner at Benchmark Capital, which this month sank $10 million into Yelp.