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Priceline.com

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Priceline.com
Company typePublic
Nasdaq: PCLN
S&P 500 Component
NASDAQ-100 Component
Founded1997[1] (online 1998)
Headquarters
800 Connecticut Avenue, Norwalk, Connecticut
Number of employees
5,700 (2013)[2]
WebsitePriceline.com

Priceline.com is an American company and a commercial website that helps users obtain discount rates for travel-related purchases such as airline tickets and hotel stays. The company is not a direct supplier of these services; instead it facilitates the provision of travel services by its suppliers to its customers. It is headquartered in Norwalk, Connecticut, United States.

Priceline was the brainchild of digital entrepreneur Jay S. Walker. The company's origins were closely tied with Walker's company Walker Digital. Hong Kong company Cheung Kong Holdings later purchased a significant portion of Priceline's stock.[4]

History

Priceline first gained prominence for its Name Your Own Price system, where travelers would name their price for airline tickets, hotel rooms, car rentals and vacation packages. While the purchaser can select a general location, service level and price, the hotel, rental car company or airline (as well as the exact location of the hotel and the exact flight itinerary) is disclosed only after the purchase had gone through, with no rights to cancel.

Priceline's cut of the proceeds was the difference between the price an individual named and the price charged by the service establishment. More recently, it has added a more traditional model where travelers are presented prices and are also told the name of the establishment. Travelers can still choose to name their price for airline tickets, hotel rooms and rental cars. The number of airlines, hotels and car rental company participants in the name your own price program has increased as these suppliers utilize this opaque market Priceline created to sell their perishable inventory without lowering prices through other traditional sales channels. Priceline now also sells discounted cruises, as well as tours and attractions.

Priceline.com also experimented with selling gasoline and groceries under the Name Your Own Price model in 2000, at the height of the dot-com bubble, through a partially owned affiliate, WebHouse Club. Priceline also got into the online auction business with Priceline Yard Sales, where individuals would use the Priceline system to haggle for various second-hand items and trade them in person. Priceline also sold long distance telephone service and automobiles under the Name Your Own Price model. All of these experiments were terminated in 2002. Another experiment, the Name Your Own Rate system for home loans, continues under a license with EverBank. In 2002 Priceline licensed its "Name Your Own Price" travel system to eBay.

During November 2007 Priceline “permanently” eliminated all booking fees on published airfares.

Spokespeople

William Shatner

For years, Priceline's official spokesman has been William Shatner, who agreed to do the spots in exchange for stock in the company.[5] The arrangement turned out to be quite profitable for Shatner, who sold much of the stock shortly before its value plummeted in the dot-com bust and has since made approximately $600 million from Priceline.com. (This reported sum has been met with some skepticism from the financial press.[6]) An early ad campaign featuring Shatner had him belt out popular songs in spoken word, in the style of his album, The Transformed Man. He was "replaced" in 2004 by his Star Trek co-star, Leonard Nimoy. Shatner still appeared in spots for Priceline, running into Nimoy as his replacement. When that campaign ended, Shatner again became Priceline's sole spokesperson.

In 2007, a new ad campaign by Butler, Shine, Stern & Partners had Shatner take on the role of the Priceline Negotiator. In commercials that began airing January 22, 2012, Shatner's Negotiator character apparently dies as a bus falls off a bridge and explodes.[7] Subsequent ads have featured his "spirit," still advertising Priceline.com from beyond the grave. In August 2012, Shatner was brought back in a commercial located on a stormy, cloudy beach, parodying the end of the film Point Break. A man, apparently an investigator, stands next to Shatner. Shatner is holding a wooden surfboard, wearing a suit with shortened pants and pitching the new way of booking a hotel. He states that surfing is his life now and "we'll see where the waves take me. Sayonara!" and goes charging into the waves.

Priceline has been parodied on The Tonight Show by Jay Leno and in multiple Saturday Night Live skits. In a September 2008 SNL skit, during the opening monologue by Olympian Michael Phelps, Shatner rose from the audience to give Phelps tips on product endorsements.[citation needed]

Theresa Caputo (Long Island Medium)

In June 2012, Theresa Caputo, star of the television show Long Island Medium, appeared in a commercial for Priceline.com, in which she portrayed herself "connecting" with the late Priceline Negotiator character previously played by William Shatner.[8] However, this commercial has sparked controversy, since the commercial appears to make light of the Native American belief of smudging.[9]

JREF President DJ Grothe released an open letter calling out Priceline.com for endorsing Caputo, stating, "It is difficult to watch the show and not feel heartbroken for those who are desperate to hear from the departed... and even more so if they are being manipulated by a charlatan." Grothe urges Priceline.com to "invite... your new representative" to take the James Randi Million Dollar challenge and prove her credentials.[10]

Kaley Cuoco (the Big Bang Theory)

In January 2013, Kaley Cuoco from the sitcom The Big Bang Theory joined William Shatner as his fictitious daughter in Priceline.com commercials [11]

Acquisitions

Agoda.com

In November 2007 Priceline acquired Singapore-based Agoda,[12] an online hotel reservations service which provides a service similar to Priceline's but specializing in Asia Pacific. Agoda's network includes 27,000 hotels in Asia and more than 168,000 worldwide.[13]

Booking.com

Booking.com is a large online travel agency specialized on hotel reservations and other accommodations. Booking.com has been denied by the higher regional court of Berlin to sell hotel popularity rankings in Germany.[14] Booking.com offers a best price guarantee as many hotel chains and other online travel agencies do; a much smaller German competitor of Booking.com, however, was ordered by the higher regional court of Düsseldorf not to enforce a clause of its contract for hotel partners that ordered the hotels to guarantee a best price to the online travel agency.[15] Established in 1996, Booking.com B.V. owns and operates Booking.com™, and is part of the Priceline Group. As of September 26, 2011 Darren R. Huston has been named Chief Executive Officer of Booking.com.

TravelJigsaw

Priceline purchased TravelJigsaw as part of its international expansion strategy. Under the new financing deal TravelJigsaw will be provided with sufficient capital to enable working growth in order that ISIS may release some of its substantial investment in the travel specialist.

TravelJigsaw has reported an "extremely successful" sixth year of trading with turnover increasing by 32 per cent. TravelJigsaw posted a turnover of £157.1m in the 12 months to 31 December 2010, up from £119m a year earlier. Gross profit increased from £27.3m to £38m for the same reporting periods. The company currently employs in excess of 600 staff and latest accounts show an annual turnover reaching £500 million.

Gregory Wills, TravelJigsaw’s managing director, says the company will work closely with Booking.com and Agoda to build distribution. Key questions looming will be the interplay between TravelJigsaw, Booking.com, Agoda and Priceline.com, as well as what kind of response, if any, Expedia has to Priceline’s car-rental acquisition. So, one can imagine a lot of cross-promotion between Booking.com, Agoda and TravelJigsaw in various markets, if not some integration in the future.

Active Hotels

In November 2006, Active Hotels Limited merged some operations with Booking.com. The company’s physical locations and personnel are not affected by the name change. ActiveHotels.com became part of Booking.com and forwards to Booking.com website.

Kayak

In November 2012, Priceline announced that it had agreed to acquire Kayak in a stock and cash transaction, paying approximately $500 million in cash and $1.3 billion in equity and assumed stock options.[16][17] Kayak will continue to operate independently as a Priceline Group company.[18]

Priceline branding

Priceline, Booking.com, Active Hotels and Agoda are separately branded for dissimilar demographics. However each company is regulated and integrated into the Priceline business model. Priceline is also the most talked about travel booking site online in the Brand Passion Index.[19]

References

  1. ^ "Priceline.com Incorporated Rankings". Hoovers. Retrieved December 16, 2011.
  2. ^ "About Priceline". Priceline.com. Retrieved May 7, 2013.
  3. ^ "priceline.com Site Info". Alexa Internet. Retrieved 2013-05-02.
  4. ^ "Ownership". MSN Money. Retrieved September 1, 2012.
  5. ^ Carlson, Nicholas (May 4, 2010). "William Shatner Has Made $600 Million Shilling Priceline.com". Business Insider.
  6. ^ "William Shatner Lives Long and Prospers -- but Did He Really Make $600 Million?". DailyFinance. Retrieved March 26, 2011.
  7. ^ Elber, Lynn (January 19, 2012). "Goodbye to William Shatner — again". News & Record. Associated Press. Retrieved January 19, 2012.
  8. ^ "TV's Long Island Medium Theresa Caputo Channels The Dearly Departed Negotiator In New Priceline.com TV Spot". Reuters. June 25, 2012. Retrieved November 1, 2012.
  9. ^ "Priceline: Remove the Long Island Medium smudging commercial from the air". Change.org.
  10. ^ Grothe, DJ. "Priceline.com: Will You Prove Your Spokesperson Worthy for a Million Dollars?". The Huffington Post. Retrieved August 15, 2012.
  11. ^ http://www.usatoday.com/story/money/business/2013/01/09/cuoco-shatner-priceline-ads/1819799/
  12. ^ "Priceline.com Acquires Asian Online Hotel Reservation Service Agoda Company". Agoda. November 10, 2007.
  13. ^ "About Agoda?". Agoda. Retrieved May 7, 2008.
  14. ^ http://dejure.org/dienste/vernetzung/rechtsprechung?Text=16%20O%20418/11
  15. ^ Preliminary injunction of the Higher Regional Court of Düsseldorf
  16. ^ "Priceline.com Agrees to Acquire KAYAK Software Corporation". Princeline.com. November 8, 2012. Retrieved November 8, 2012.
  17. ^ Smith, Olivia (November 8, 2012). "Priceline to buy Kayak for $1.8 billion". CNN Money. Time Warner. Retrieved November 8, 2012.
  18. ^ "Priceline to acquire Kayak in $1.8 billion deal". Boston.com. NY Times Co. November 8, 2012. Retrieved November 8, 2012.
  19. ^ Brand Passion Index for Travel Booking sites NetBase, March 30, 2011
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