Facing pressure from competitors and the stock market, Priceline.com announced that it set a single-day sales record by selling more than 10,000 airline tickets Thursday.
The Stanford, Connecticut-based online pricing system — which allows customers to name their own price for plane tickets, hotels and rental cars — was selling 1,000 tickets on average per day at the start of the year.
Today’s announcement comes as the company faces mounting pressure from competitors, particularly from Microsoft. The Redmond, Washington-based software giant announced earlier this week that it is introducing a feature on its Expedia travel site which allows consumers to name their price for hotel rooms.
Priceline is considered to be the pioneer of the “price-naming” concept and has a patented business method. The company is reportedly waiting for advice from its lawyers on how to respond to Microsoft. The company has said that it will take action if its intellectual property is infringed.
Some analysts believe that the Microsoft foray into the name-your-price market does not pose a significant threat to Priceline. However, other sites such as Mercata, Travelocity and Onsale have also recently introduced online consumers price-saving methods.
Riding the Volatile Market Swing
Priceline is a passenger on the Internet stock roller coaster, plunging and rising with startling speed. The company raised $160 million (US$) in an April initial public offering, selling shares at $16. The shares closed at nearly $70 the first day of trading and went up to about $165 later in the month.
Since then, prices have fallen nearly two-thirds, including a 14 percent decline after Microsoft’s Expedia announcement. Earlier this month, Priceline disclosed plans to offer 4.5 million shares in an effort to raise an additional $300 million.
The company lost $17 million in the first quarter of this year. Revenues, however, leapt 160 percent to nearly $50 million. Much of the increase can be attributed to Priceline’s national advertising campaign, which features Star Trek’s William Shatner.