In my case I search using Kayak, but never really book the ticket from Kayak (don't follow their link to the airline). I go directly to the airline site and book it there. Many people I know do the same. I despise using Orbitz/Priceline other than just a cursory glance to see if there are cheaper tickets. I know that sometimes an itinerary involves multiple airlines and that is when there might be an advantage booking through, say Orbitz, but even in those cases I just book separate tickets.
Why is this free search/booking industry still unsaturated and is there really a demand for such capital infusion?
Update: My question is specific to flight search, because I think hotel search can be profitable model as sometimes these sites provide better rates than the hotel's site.