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Priceline.com, First USA Sign Marketing Agreement

Stamford, CT-based Priceline.com, the name-your-own-price e-commerce operation, signed a five-year, performance-based marketing agreement with Visa card issuer First USA that could generate up to $200 million over five years for Priceline.com.

The companies said they expect the marketing program to be rolled out over the next several months. Specific financial arrangements were not disclosed.

Under the priceline.com "adaptive marketing" program, First USA will enable customers to increase the amount of their priceline.com purchase offers by specified amounts by applying for a First USA credit card or using a First USA credit card to complete their online transaction.

For example, a customer offering $200 for an airline ticket who applies for or uses a First USA credit card might have $40 instantly added to the purchase offer, increasing the customer's chances of getting a ticket at no additional cost. Priceline.com also will offer other promotions linked to First USA's customer acquisition and loyalty programs.

"This alliance represents a win for consumers, a win for priceline.com and a win for First USA," said Richard S. Braddock, chairman and CEO of priceline.com. "We believe that many priceline.com customers will accept First USA's promotional offers in return for even more savings or increasing their chances of getting leisure airline tickets, hotel rooms or future priceline.com services."

"Priceline.com will enable First USA to extend its leadership position in next-generation credit card marketing," said Jim Stewart, executive vice president for partnership and Internet marketing at First USA, a unit of Bank One Corp. "The concept of moving beyond online advertising and promotions into becoming an integral part of online e-commerce transactions and immediately benefiting the customer is groundbreaking."

Priceline.com's adaptive marketing programs were invented by Walker Digital, a Stamford, CT-based intellectual property laboratory where Jay Walker is founder and chairman (Walker is also founder and vice chairman of priceline.com). Walker Digital has various patents pending on the use of adaptive marketing during e-commerce transactions.

"For the first time, the Internet makes it possible to acquire customers for third parties while at the same time offering immediate and tangible benefits to online buyers of goods and services," said Walker.