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To: Richard Tauber who wrote (2676)	9/7/1999 6:00:00 PM
From: Frost Byte	Respond to of 4337

Goldman Sachs made comments on Priceline today: Goldman, Sachs & Co. Investment Research Priceline.com Incorporated * * Progress in Core Biz; Expanding into New Areas; RL * * *************************************************************************** * We are raising Priceline.com (PCLN) est's post-offering and expectthe * * shares to react favorably to new initiatives. PCLN is focused on * * transitioning to a customer mgmt company. We expect it to makeannc'mnts* * regarding expansion into new categories and opportunities over thenext * * few Q's. We are raising our 99, 00, and 01 rev and EPS est's to * * $466.6m/($0.41), $759.3m/($0.25), $1048.7m/$0.01 from$252.8m/($0.42), * * $393.7m/($0.26), $585.4m/$0.00 to reflect strong Q2 results, therecent * * offering, and the ongoing strength of the business. We expect PCLN to * * leverage its brand and expertise in Buyer-Driven Commerce intomultiple * * new horizontal categories and other potentially large opportunities.RL.* *************************************************************************** Rakesh Sood (New York) 1 212-902-1950 - Investment Research Michael Parekh (New York) 1 212-902-8960 - Investment Research =================== NOTE 8:58 AM September 07, 1999 =================== Stk Latest 52 Week Mkt Cap YTD Pr Cur Rtg Close Range (mm $) Change Yield --- ------ ------- ------- ------ ----- Priceline.com Incorporated RL 66.38 163-59 9614.0 % 0.0% --------------Earnings Per Share--------------- PCLN Mar Jun Sep Dec FY CY 2000 FY -0.09 -0.07 -0.06 -0.04 -0.25 1999 FY -0.12A -0.10 A -0.10 -0.09 -0.41 1998 FY(A) -0.08 -0.18 -0.12 -0.11 -0.55 -Abs P/E on- -Rel P/E on-- EV/NxtFY LT EPS Cur Nxt Cur Nxt EBITDA Growth ----- ----- ----- ----- -------- ------ PCLN FY -161.X -265.X -5.8X -10.4X NA NA% =========================================================================== * PCLN remains focused on transitioning to a customer relationship management company from a purely transaction-based web site. In this way, it will begin to leverage customer profiles in order to better target offers to consumers, which should drive increased revenueacross multiple categories. To this end the company has introduced such new initiatives as its simplified re-submission process and its bestefforts program, which proactively targets customers whose offers were closeto an acceptable fulfillment price. These initiatives have helpedincrease the fill rate to around 50% of reasonable offers, from approx 10% in Q3:98. Furthermore, PCLN continues to work on site improvements, andwe would expect to see increased ease-of-use, personalization, and morepro active content (potentially with fees to PCLN) over the comingmonths. Finally, PCLN is also working to improve customer service, and is implementing a Silknet solution to improve its interactions with customers. We believe the transition to a more customer focusedcompany should drive increased new and repeat usage of the PCLN service, and improve the overall customer experience. * We expect PCLN will make its entry into a variety of new horizontal categories over the next several quarters. Specifically, we expect a rental car category to roll out in Q4:99, Cruise lines in Q1:00, and credit card and insurance offerings by Q2:00. Furthermore, we expectthe roll-out of new adaptive marketing programs in Q4. We would not be surprised to see announcements in the coming months in addition to these, as the company continues its horizontal expansion. We alsoexpect PCLN to leverage its brand and Buyer-Driven Commerce expertise into altogether new opportunities, which could serve to expand itsoverall market potential substantially. We would expect to see progress onB2B, B2C, C2C, and International initiatives over the next year. * PCLN's core business continues to gain momentum in the seasonallyslower (travel) Q3. On the airline side, we believe PCLN is averaging approximately 8000-plus tickets per day, with a fill rate of approximately 50% of reasonable offers, up from 1000 tickets/day and17% at the beginning of the year. Furthermore, gross margins on airline tickets continue to improve. Exiting July, they were 9.1% excluding adaptive marketing, and we believe they could reach 15% (ex adaptive marketing) in the intermediate term. PCLN's Hotel offering is also showing significant improvements. PCLN's other offerings alsocontinue to evolve. In financial services, its recent deal with AllianceCapital significantly improves its offering in that it complements itscurrent relationship with LendingTree and offers faster approval of ratesusing Fannie Mae's automated underwriting system. In auto, PCLN expects to have national coverage with its auto service in Q1:00. We believethe company is also beginning to work more closely with manufacturers in this area, and could have announcements in the coming months. * We believe the PCLN shares, which are currently 60% off their highs, have not participated in the recent recovery experienced by several other e-commerce companies due to concerns regarding the company's ability to expand horizontally. Given our continued confidence inthe horizontal extensibility of the Priceline.com platform, and imminentnew initiatives on that front, we believe the shares are attractive at current levels. ===========================================================================