Priceline.com(Nasdaq: PCLN) announced Thursday that it is expanding its car buying service to five more states.
The Stamford, Connecticut-based company will allow consumers to make offers on new cars in Florida, Connecticut, New Jersey, the Philadelphia area and southern California. The car buying service had been previously only been available in the New York City area and Tampa/St. Petersburg, Florida.
The move will pit the popular Priceline — said to be the second-most recognized e-commerce brand by Americans — against online car retailers like Autobytel and AutoWeb.
However, the company’s patented pricing formula will allow consumers to bid a price for a car and then wait for a match with any participating seller that is willing to meet the price. That differs from the traditional model in which online auto retailers connect consumers directly with dealers.
Priceline said it is intending to roll out the service to the rest of California later this year and to the rest of the states by the first quarter of next year. Thursday’s five-state expansion places Priceline.com in the markets that account for more than one-third of all new car buying in the U.S.
Making a Name for Itself
Priceline has been inundating the airwaves with commercials narrated by pitchman William Shatner – Captain Kirk of Star Trek fame. The company is clearly convinced that its bidding service on airline tickets, cars, hotel rooms and home mortgages is a winner.
Of course, when you are losing money at the rate of $17 (US$) million a quarter – as it did in the first quarter of this year – it’s helpful to accentuate the positive. Of positives, there are a few for Priceline.com.
The company saw first quarter revenues jump 160 percent to nearly $50 million and it added 537,000 customers in the same period. In April it reached its first million dollar sales day, just shortly after the company raised $160 million through an initial public offering.
Earlier this month, Priceline announced that it was offering 4.5 million shares of common stock at $67 a share in an effort to raise over $300 million
Priceline’s sales of airline tickets are soaring dramatically. If cars deliver the goods as another source of revenues for the company, it could pay dividends – literally and figuratively.