Interesting Article; New Concept "Buyer-Driven" Pricing...
It seems like, on a weekly basis, somebody pops up with a new
idea in e-commerce that could be built upon in a variety of ways
for a variety of industries. Here's something snagged from
internetnews.com
New Airline Ticket Site Lets Consumers Set Prices
[April 6, 1998] A Connecticut entrepreneur is planning to launch an e-commerce
system that he hopes will revolutionize the way people shop for airline tickets, and
eventually other products, allowing consumers to set the prices.
Stamford, CT-based Priceline.com will in essence allow consumers to name the
price they are willing to pay for airline tickets.
The buyer-driven system is aimed at leisure rather than business travelers, and a
dozen major U.S. and international airlines are cooperating with the venture,
Priceline.com Chairman Jay Walker told Reuters in an interview.
The company's Web site is scheduled to open for business today.
The 100-employee Priceline.com will initially focus on airline tickets, but soon will
expand into new cars, home mortgages, credit cards and personal computers,
Walker said. Walker, 42, raised $25 million in private capital to launch the service,
and said he wants to take the company public next year.
"We are expecting conservatively to sell somewhere on the order of 1,000 tickets a
week, as our initial objective," Walker said. "The site is capable of handling
100,000 hits a minute. It's a very large site we've built."
Walker concedes that few, if any, companies have as yet harnessed the Internet into
huge profits, but he is convinced he has hit upon a compelling idea.
There are about 500,000 airline seats that fly empty every day, and the airlines
would just as soon fill them with leisure travelers at bargain prices, he said.
Customers can go to Priceline.com's Web site, insert their dates and destinations, as
well as the price they can afford, and Priceline.com will respond within an hour,
Walker said.
If a customer offers $300 to fly from New York to Los Angeles, Priceline.com will
try to buy a seat for $280, and keep the difference as profit, Walker said.
The service is not for business travelers. "When you use Priceline, you must agree to
let the airlines pick the flight and the routing," Walker said. "You can't change the
tickets, and there are no frequent flyer miles." The service is initially restricted to
flights originating in the U.S., but Walker expects to expand overseas soon.
Priceline.com also offers a toll-free phone number for consumers who are not
Internet-savvy, Walker said.
"We believe we have invented a new form of commerce, which we call buyer-
driven commerce," he said. |
