[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.
