Priceline Goes to the Grocery

Looking for a cheaper gallon of milk or loaf of bread at your supermarket? Instead of clipping coupons or using scan cards, a new company based on the popular Priceline.com Inc. model will let shoppers name a price for their favorite grocery items.

WebHouse Club Inc. has licensed Priceline’s (PCLN) business model and trademark to launch its site, designed to let users name prices on a variety of retail products.

Along with the licensing agreement for which it will receive royalties, Priceline will take a majority stake in WebHouse Club Inc., although will retain no operational control. It will also provide a link from its homepage to WebHouse Club.

WebHouse Club’s inaugural service, set to launch Nov. 1, will be grocery-store items in the New York metro area. More than 600 major supermarkets and grocery stores have agreed to participate in the network. The company also plans to expand its name-your-price network of retail stores both geographically and to other retail categories in the future.

WebHouse Club will promote its site with television ads featuring William Shatner, the voice of Priceline.com.

The licensing agreement will allow the two companies to focus on their individual e-commerce sectors while still working together, said Richard S. Braddock, priceline.com’s chairman and chief executive officer.

“While priceline.com continues to aggressively expand our travel, automotive and financial services, we also recognize that our business model has tremendous potential in the retail-store sector,” Braddock said.

“To accelerate our entry into this new sector, we have chosen to employ a new business development model of licensing our technology and brand to promising new affiliate licensee startup companies.”

WebHouse Club also said expects to receive $65 million in its first round of financing from investors including Vulcan Ventures Inc., Wit Capital’s Arista Fund, Walker Digital, various private investors and Goldman Sachs.