Priceline tries to get away from it all

Priceline looks for cheap tickets for customers

By Mark Ward BBC News Online technology correspondent

Over the last year dot.coms have endured a white-knuckle ride with more switchbacks, plunges and peaks than the most extreme fairground ride.

It's one that has left even spectators gasping with shock, never mind those hurtling round the track.

But there are always those who enjoy the reckless pace and the headlong rush.

One such is Rick Braddock, chief executive of pioneering dot.com Priceline, who has seen his company's share price shoot up and down with breathtaking speed.

Bad business

Priceline floated on the US stock market in 1999. On its first day of trading its valuation leapt from $16 to $86.

Any ticket sale over the internet is more efficient than the way that airlines supplied them through travel agents

Rick Braddock, Priceline CEO

A month later it was more than $162.

Now it is trading around $4 and the respect investors have for net-based business is hovering at the same ankle-high mark.

But Mr Braddock is undaunted.

"I have enjoyed going through this," he told BBC News Online.

"I never thought we were in the kind of trouble that the market thought we were in," he said.

"We have to feel good because we got through a period that was very weird and had very bad business values dominating the whole medium," he said.

You set the price

Priceline is a thoroughbred dot.com, and even Mr Braddock admits that, without the internet, it would not exist.

Shatner: Star of Priceline adverts

The service works by letting consumers state how much they are willing to pay for an airfare, hotel room, mortgage or new car.

Priceline then goes away and finds out if any of its partners are willing to sell the consumers what they want at that price.

Consumers are encouraged to do their homework to ensure that their bids are realistic.

"We are not trying to trade on consumer ignorance," said Mr Braddock.

Now, barely four years after it launched, Priceline has 13 million registered customers and a billion dollar business. It has just reported profits for the first quarter of 2002.

Tough life

Mr Braddock said Priceline worked because it gave something to both consumers and companies.

He said it gave consumers tickets that were cheaper than they might otherwise get, and it gave airlines a way to offer seats at different discount rates without forcing them to reveal all their prices.

There was no fear that the airlines would set up their own discount seat selling system anytime soon, or use e-commerce to such efficiency that the room for discounts almost disappears.

"Any ticket sale over the internet is more efficient than the way that airlines supplied them through travel agents," said Mr Braddock, "I don't think it will be obviated by airline cost reductions or anything else they can do."

But, despite Mr Braddock's confidence, life is still tough for a dot.com.

When Priceline reported profits for the quarter ending in March 2002, the news sent its stock price lower.

Clearly, the hangover from the dot.com crash is still being felt. Net-based businesses are going to have to report a lot more profits before all the doubts are dissolved.