> How could not having all that free advertising from flight search engines possibly be a good thing for Southwest?
It's not 'free'. See this quora answer for more: (https://www.quora.com/Why-does-Southwest-choose-not-to-offer...)
Short Answer: It costs money to be there and they can control the variables and environment better on their website.
Long Answer: It dates back to Southwest's routes in competing with the car for travel. In order to be price competitive, they did not want to pay travel agents a 10% commission. (This was the 1970s) So they sold tickets by the phone, at the airport, or at their office, but always direct.
As computers evolved, travel agents began connecting to an airlines fares by computer, rather than books and a phone. Airlines began developing proprietary systems for managing ticket sales, allowing other airlines to be in their systems for a fee. The biggest were Apollo (United) and Sabre (American). Southwest still refused to pay the distribution costs of the tickets.
When the internet became more broadly available to consumers, Southwest jumped on the opportunity, becoming the first major airline to sell tickets online. Other airline followed and soon after, 3rd party sites came to be, using the GDS' (Global Distribution Systems) like Sabre and Apollo to display all of the flights and fares. Acting like modern day travel agents, and putting many travel agents out of business.
Today, while Southwest has become a much larger airline, it still does not want to pay the GDS' for access to their systems. However, today Southwest has a much stronger brand which can drive more people to their website. And by having the website as the primary channel of distribution, they can control a lot of things that they could not within the confines of a GDS.
It has been debated whether the GDS' are really necessary anymore as middlemen. And besides Southwest, other airlines are trying to bring more people to their controlled distribution channel. In the past few days, Delta and American have removed their flight from several 3rd party websites.