Can PTVL beat this new airline tickets concept?
Firm lets users name their
price
By Reuters
Special to CNET NEWS.COM
April 6, 1998, 11:00 a.m. PT
HARTFORD, Connecticut--A Connecticut
entrepreneur today launched an Internet commerce
system he hopes will revolutionize the way people
shop for airline tickets, and eventually other
products.
Stamford, Connecticut-based Priceline.com allows
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 said.
The 100-employee Priceline.com initially will 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 he aims 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.
Analysts said Priceline.com is coming online as
Internet commerce is beginning to take off.
"1998 will be a breakthrough year for Internet
commerce," said Nicole Vanderbilt, director of digital
commerce at Jupiter Communications. "We expect
consumers to spend about $5.8 billion shopping
online."
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.
Priceline.com will launch a $10 million national
advertising campaign this week. The radio,
newspaper, and billboard campaign, featuring actor
William Shatner, was created by Boston agency
Heater Advertising. |
