RealTime IT News

Priceline Scores an eBay Deal

Name-your-own-price travel outfit Priceline.com, turning out to be an Internet survivor, scored a nice coup by signing an agreement to create a new travel booking service for Web auction giant eBay Inc.

Norwalk, Conn.-based Priceline said the service will serve as the cornerstone of eBay's travel business, which will include airline, hotel, car, cruises, timeshares and vacation packages.

Financial arrangements were not disclosed, but the market liked the deal as Priceline stock was climbing in the early going, after closing Thursday up 29 cents at $6.30.

"We are in the process of building out all of our high-potential businesses," said Meg Whitman, president and CEO of San Jose, Calif.-based eBay . "eBay Travel is growing quickly and holds tremendous promise. We couldn't ask for a better partner than priceline.com to help us provide the best travel product inventory to our community."

Indeed, eBay has been actively making deals lately. Just this week it signed a pact with renowned upscale auction house Sotheby's and established itself as an official online car dealer by launching an Assurance Program on eBaymotors.com.

For Priceline, the incentive is clear - access to a multi-billion dollar market.

eBay said that "recent research shows that 42 percent of eBay users purchased online travel in the last year, representing $8.4 billion in gross merchandise sales." Of course, that doesn't mean that all that money was spent on eBay, but Priceline now will have a good chance of getting a bigger slice of that pie.

Priceline said the new eBay service will allow eBay visitors to book reservations either via an auction style or in a "buy it now" format. Priceline.com will be responsible for the technology, development, transaction processing infrastructure, and ongoing support of the booking service.

"Priceline.com is uniquely positioned to provide a distinctive and compelling travel offering for eBay users that will fit nicely with eBay's existing business and brand," said Richard S. Braddock, Priceline.com chairman and CEO.

Meanwhile, Delta Air Lines this week reported that it has reduced its stake in Priceline to 5.68 percent from 6.98 percent. The airline sold 2,983,274 common shares between Aug. 8 and Jan. 30 at prices ranging from $6.07 per share to $8.77 per share, the company said in a filing with the U.S. Securities and Exchange Commission.