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Priceline-Com

Page history last edited by PBworks 11 years, 8 months ago

Priceline.com

 

About Priceline.com

 

Priceline.com is a travel service that offers leisure airline tickets, hotel rooms, rental cars, vacation packages and cruises. Priceline.com also has a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com operates the retail travel Web sites Travelweb.com, ActiveReservations.com, Lowestfare.com, Rentalcars.com and Breezenet.com. Priceline.com licenses its business model to independent licensees, including pricelinemortgage and certain international licensees.

 

Priceline.com pioneered a unique new type of e-commerce known as a "demand collection system" that enables consumers to use the Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Priceline.com is the world's first buying service through which consumers name the price they're willing to pay. Leveraging the unique attributes of the Internet, Priceline finds sellers willing to meet buyers' needs and price, thus facilitating thousands of buyer-driven transactions each day.

 

[Source: Priceline.com, March 2005]

 

Things to read:

 

* About Priceline.com - http://www.priceline.com/ourcompany/ourcompany.asp

* How the Priceline.com "Name Your Own Price"(SM) service works - http://www.priceline.com/customerservice/faq/howitworks/howitworks.asp

 

Questions to consider:

 

* What is the basis of the Priceline "demand collection system" model? How does Priceline make money in its business?

* The Priceline model is frequently referred to as a "reverse auction". Is the Priceline "name your own price" service in fact an auction, strictly speaking? Why or why not?

* How widely applicable is the Priceline model?

 

 

Background info

source: http://en.wikipedia.org/wiki/Priceline

 

Priceline.com (NASDAQ: PCLN) is a website devoted to helping users obtain discount rates for travel-related items such as airline tickets and hotel stays. It is headquartered in Norwalk, Connecticut, United States. Priceline is the brainchild of venture capitalist Jesse Fink and of digital entrepreneur Jay Walker; the company's origins were closely tied with Walker's company Walker Digital. Hong Kong company Cheung Kong Holdings now owns a significant portion of Priceline's stock.1

 

It first gained prominence for its Name Your Own Price system, where travelers would name their price for airline tickets, hotel rooms, and car rentals. The price would be compared to undisclosed prices in the Priceline database, with the purchaser knowing the location and name of the rental car company, airline, or hotel only after the purchase had gone through, with no rights to cancel. Priceline's cut of the proceeds was the difference between the price an individual named and the price charged by the service establishment. More recently, it has moved to a more traditional model where travelers are presented prices while not being told the name of the establishment. Travelers can still choose to name their price but the number of participants in that program has significantly diminished.

 

Priceline.com also experimented with selling gasoline and groceries under the Name Your Own Price model in 2000, at the height of the dot-com bubble, through a partially owned affiliate, WebHouse Club. Priceline also got into the online auction business with Priceline Yard Sales, where individuals would use the Priceline system to haggle for various second hand items and trade them in person. Priceline also sold long distance telephone service and automobiles under the Name Your Own Price model. All of these experiments were terminated in 2002. Another experiment, the Name Your Own Rate system for home loans, continues under a license with EverBank.

 

For years, Priceline's official spokesperson was William Shatner, who agreed to do the spots for free in exchange for stock in the company. The arrangement turned out to be quite profitable for Shatner, who sold much of the stock shortly before its value plummeted in the dot-com bust. An early ad campaign featuring Shatner had him belt out popular songs in spoken word, in the style of his album, The Transformed Man. He was "replaced" in 2004 by his Star Trek co-star, Leonard Nimoy. Shatner still appeared in spots for Priceline, running into Nimoy as his replacement. That campaign is now over, and Shatner is currently Priceline's sole spokespreson.

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