Priceline posts profit, acquires travelweb.com

[gleff]

http://www.washingtonpost.com/wp-dyn/artic...5-2004May3.html

Priceline.com Inc. Monday reported a first-quarter profit, boosted by higher revenue and lower operating costs.

The Norwalk-based travel-booking Web site also announced the acquisition of most of Travelweb.com, a hotel reservation site, and the filing of a shelf registration statement for $100 million in common stock.

In the first quarter, Priceline earned $4.3 million, or 11 cents a share, after preferred dividends. In the same period last year, it lost $8 million, or 21 cents a share.

[gleff]

Presumably Priceline wants to start offering retail hotel bookings to customers whose bids aren't accepted. They're likely to book a hotel anyway, why let the customer leave for Expedia, etc?

[WillTravel]

I thought that was why they have the Lowestfare.com offerings. But presumably TravelWeb will provide further options. I wonder if this new purchase will give Priceline itself greater leeway in setting Priceline rates.

[gleff]

I wonder if this new purchase will give Priceline itself greater leeway in setting Priceline rates.

You mean that they would book the highest applicable rate, including non-opaque rates? Would that actually help them, since they swallow the overbid amount anyway? I guess it could if the rate they were booking was commissionable at a higher rate than the standard Priceline commission.