PCLN-How "Big" Is Priceline.com? (Great Article)
STAMFORD, Conn.--(BUSINESS WIRE)--April 26, 1999--
Patented E-Commerce Business Model Achieves Broad Acceptance:
Consumers Name Their Prices Across Multiple Product Lines
-- 330,000 leisure airline tickets sold in first 12 months
-- 75,000 hotel room nights filled since October launch
-- $125 million in home mortgage offers accepted in first 90 days of
operation
-- $11 million in new car sales in New York test market
1 Million Consumers Try Priceline.com In First Year Of Operation,
With 300,000 New Customers Naming Their Own Price Each Quarter
Almost anyone within earshot of a radio has probably heard celebrity spokesman William Shatner talking about how priceline.com (Nasdaq:PCLN) is going to be "big...really big." Today, the patented e-commerce system released new consumer metrics showing just how dramatically value-conscious customers are responding to the priceline.com proposition to name your own price on the Internet and save money.
In its first full year of operation, over 1 million individual consumers have used priceline.com to name their own price for everything from domestic and international leisure airline tickets to hotel rooms, new cars, home mortgages, refinancing and home equity loans. The service is now averaging over 300,000 new individual customers a quarter using one or more of priceline.com's services.
In its travel services business, priceline.com said it has sold more than 330,000 leisure airline tickets in its first 12 months of operation. Priceline.com is now selling an average of more than 20,000 leisure airline tickets a week, making it one of America's largest sellers of leisure airline tickets. On April 19 and 20, the service set two consecutive sales records of over 4,300 tickets, or approximately one ticket sold every 20 seconds, 24 hours a day.
Priceline.com's second name-your-price travel service, for hotel rooms, continues to grow at a rapid pace. Launched in late October 1998 in 26 cities, the service was expanded last week to cover over 1,100 cities, towns and resorts in all 50 states. 4,250 quality brand-name hotels have signed up to offer unsold rooms through priceline.com. Unlike hotel services on the Internet that focus primarily on major cities, priceline.com offers rooms in every major city as well as hundreds of smaller to medium-size cities and towns. Priceline.com's hotel service has sold more than 75,000 room nights in its first six months of operation, and currently sells over 5,000 hotel room nights a week.
Patented Business Model Working In Multiple Industries
"Priceline.com was conceived as a horizontal business with the ability to deliver benefits to consumers and major brands across a wide variety of industries, from travel, to automotive, to personal finance and beyond," said Rick Braddock, priceline.com's chairman and CEO. "In a very short time, our product teams have been able to deliver on the promise of our proprietary business model by successfully implementing our plan to roll out priceline.com's system into major industry sectors with very strong results."
"Priceline.com is a powerful Internet-based idea for both buyers and sellers," said Jay Walker, founder and vice chairman of priceline.com. "For the first time, priceline.com gives average consumers the power to tell big companies what they want to pay for goods and services. Sellers on the other hand can fill as much of that demand as they want at prices well below retail prices but still above their costs. And they can do so without affecting their retail distribution channels or retail prices."
Priceline.com's home financing service, launched in January 1999, lets consumers name their interest rate and terms for a home mortgage, refinancing or a home equity loan. In the last 90 days, priceline.com has received over 10,000 mortgage requests and has helped consumers obtain more than $125 million in approved requests for home financing. Unlike other Internet finance services where lenders tell consumers what rates are available to them, priceline.com enables its customers to save money by using priceline.com to tell lenders the exact interest rate and points they want to pay and let priceline.com find a lender willing to agree to those terms.
Priceline.com's new car service, which is being offered on a cash-sales-only test basis in the New York metro area, has sold over $11 million worth of new cars since the beta test began in the summer of 1998. Unlike other Internet car-buying services that generate leads for dealerships, and then have salesmen follow up to negotiate a price directly with the buyer, priceline.com lets the buyer save money by naming his or her own price for the exact car they want. Priceline.com never gives the buyer's name to a car dealer until after the dealer agrees in writing to sell the car at the buyer's price. With priceline.com's auto service, the buyer never has to spend time and energy negotiating with a car salesman. The entire priceline.com car buying process is completely haggle-free.
Priceline.com's "open system" works with all factory-authorized dealerships in a market, not just a select few. The service is available only in the New York metro area, and priceline.com is currently testing various methods of on-site auto financing prior to its intended national auto service roll out by the end of this year.
Up To 73% Of Reasonable Requests Being Filled
More consumers than ever before are saving money by purchasing goods and services through priceline.com at the prices they want to pay. For example, 18 major domestic and international airlines are currently participating in priceline.com's airline service, compared to five when the service launched in April 1998. As a result, the company's airline service is now able to fill an average 35 percent of all reasonable offers for leisure airline tickets on domestic flights on the first try - up from 24 percent just two months ago. On some popular routes, such as New York to San Francisco or Los Angeles to London, priceline.com fills up to 73 percent of all reasonable offers on the first try. Priceline.com considers an offer for an airline ticket to be reasonable when it is no more than 30 percent below the lowest generally available advance-purchase fare for the same route.
All of priceline.com's services are easy to use and deliver a yes or no response quickly. There is never a charge to make a purchase request through the service. Consumers can reach priceline.com through its Web site (www.priceline.com). For airline tickets and hotel rooms, priceline.com also has a toll-free 1-800-PRICELINE number for making purchase requests. Consumers simply name the price they want to pay for an airline ticket, hotel room, new car or loan. Priceline.com takes the offer and presents it to participating sellers, who can fill as much of that demand as they want at the price and savings determined by the buyers.
This press release may contain forward-looking statements which are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions including, without limitation, "may," "will," "believes," "should," "could," "hope," "expects," "expected," "does not currently expect," "anticipates," "predicts," "potential," and "forecast," reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies and other factors described in the Company's filing with the Securities and Exchange Commission. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
CONTACT:
priceline.com, Stamford
Brian Ek, 203/705-3026
E-mail: brian.ek@priceline.com
or
priceline.com, Stamford
Mike Darcy, 203/705-3331
E-mail: mike.darcy@priceline.com
or
Connors Communications, New York
Jennifer Carr, 212/807-7500
E-mail: jcarr@connors.com
KEYWORD: CONNECTICUT
BW1005 APR 26,1999
3:17 PACIFIC
06:17 EASTERN
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