Priceline takes off for Europe
Published: 29 Jun 2000 09:57 BST
Priceline is moving into Europe, and its new overseas chief is one big cheese.
Dennis Malamatinas, who currently serves as CEO of Burger King, will head the newly formed Priceline.com Europe, a joint venture between the American firm and General Atlantic Partners LLC. Priceline Executive Vice President and founder Timothy G. Brier will serve as chairman.
The news sent the company's stock up 2 points, or 5.26 percent, to 40.
The new company plans to begin operations in the fourth quarter. Priceline Europe will initially offer its name-your-own-price service for airline tickets, hotel rooms, rental cars and long-distance phone service.
"The time has come for European consumers to benefit from Priceline.com's unique buyer-driven e-commerce model," Malamatinas said in a release. "We believe that the European markets will respond favorably and quickly to this consumer pricing model."
Priceline is probably one of the best-known e-commerce firms after Amazon.com. The company's service asks consumers to choose a price for a specific product, then surveys providers to see if any want to sell at that price. While the service can net consumers deep discounts, particularly on perishable goods such as airline tickets, it does require them to give up some options. Once a merchant matches a consumer's hoped-for price, the consumer's credit card is charged and the good is purchased.
In the United States, Priceline has managed to build a customer base of 5.3 million customers and has expanded into other areas, including gasoline and groceries, with its WebHouse Club division.
Priceline said it lost $7.3m (£4.81m) , or 4 cents per share, in the first quarter, excluding option payroll taxes, warrant charges and noncash accretion on convertible preferred stock.
Including those items, the company lost $13.5m, or 8 cents per share, in the first quarter of the year, on sales of $313m. That compares to a loss of $25.5m, or 27 cents per share, in the year-ago quarter, when sales were $49.4m.
The new European firm will pay Priceline an annual fee to licence its intellectual property and business model. Priceline has purchased a warrant in the new firm allowing it to take a majority equity stake under certain conditions. General Atlantic is also taking an equity stake in the new firm, although specific financial details were not released.
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