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To: Victor Lazlo who wrote (109693)	10/6/2000 12:25:52 PM
From: H James Morris	Read Replies (2) \| Respond to of 164684

>Mr. Walker poured about $179 million of his own money into WebHouse Club. That included the $125 million he raised in the past two months by selling Priceline shares to three high-profile investors: Microsoft co-founder Paul G. Allen's Vulcan Ventures Inc., TCI founder John Malone's Liberty Media Corp. and Saudi Arabian Prince Alwaleed bin Talal. Soon after, Priceline announced disappointing third-quarter results. The company has been slapped with two class-action lawsuits this week, which allege that Mr. Walker and other insiders sold shares while knowing that the company would do poorly. Closing Up the Club A WebHouse Club snapshot: CEO: Jon Otto Funding: $363 million Investors: Vulcan Ventures, Jay Walker, Goldman Sachs, among others Participating Stores: 7,200 grocery and 6,000 gasoline Mr. Walker denies the allegations and says he invested all of the proceeds of the sale into WebHouse Club. Priceline has a similar business model to WebHouse Club's but has had better success, such as convincing airlines to offer discount tickets, partly because many of the airlines own warrants in Priceline. However, Priceline stumbled with airline-ticket sales recently as competition mounted. The airlines themselves recently banded together to start their own Web site, Hotwire, which offers discount tickets without requiring consumers to bid. Last month, Priceline warned that third-quarter revenue won't meet analysts' expectations because of weakness in selling airline tickets due to pricing competition from the airlines. The combination spells bad news for Priceline, whose shares plunged 38% Thursday to a new low of $5.81 in Nasdaq Stock Market trading. "The name-your-own-price model is obviously not that extendible beyond air, hotels and car rentals," says Holly Becker, an analyst at Lehman Brothers. "Now we're left with a travel agency." Some consumers wish it weren't so. Jillian Kasky, a New York City resident, said she once paid 11 cents for five bananas. "I used to walk around and brag about this stuff," she says. "I'm devastated."