RealTime IT News

Priceline.com to Launch in Europe

[London, ENGLAND] Priceline.com, the e-commerce site that lets users set the prices they are willing to pay, announced Wednesday it is joining with investment company General Atlantic Partners to form priceline.com Europe.

The new company will launch in the fourth quarter 2000, headed by Dennis Malamatinas who is currently chief executive of Burger King Corporation and a director of both Diageo plc and Reuters plc.

Timothy G. Brier, one of priceline.com's founders, becomes chairman of the European company, effective immediately, while Malamatinas takes up his role of president and chief executive on September 1.

Brier explained how priceline.com has been changing the way in which products and services are priced and sold in the United States -- and how this would carry over to the European market.

"Instead of accepting the posted price on an item, consumers can set the price they want to pay and let priceline.com Europe go to work finding the requested products or services at the consumer's specified price," said Brier.

Brier claimed that savings of 30 percent, 40 percent -- or more -- were not uncommon as a result of using the priceline.com service. He said priceline.com had built a base of over 5.3 million unique customers who purchase products in many different categories, producing an anticipated revenue of over $1 billion in the second full year of operation.

As a separate company, priceline.com Europe will license priceline.com's business model, paying an annual fee for intellectual property. Unusually, priceline.com will not have an equity stake in the new venture unless it exercises a warrant that will enable it to take a majority stake "under certain conditions." In other words, the performance of priceline.com Europe will not affect the bottom line of the U.S. company.

Malamatinas said he thought that European markets would respond favorably and quickly to priceline.com's consumer pricing model.

The European venture is the third step in priceline.com's international expansion. Back in January it made a deal with Hutchison Whampoa Limited to introduce the service throughout Asia, while in February it revealed plans for MyPrice, a company it intends to launch in Australia and New Zealand. Details of both these deals have only recently been completed.