Brian Ek, vice president of corporate communications at Priceline.com, gave me an economics lesson the other day. You've heard of Priceline. It's that company that tells you to set the price you want to pay for airline tickets, then it shops around for an airline company that will sell them to you.
"Basically," said Ek from his home in Connecticut where he was watching the Fiesta Bowl football game, "there have been five ways of pricing. The most ancient was barter. Then there was retail, where the seller set the price. Then there was auction or reverse auction, where buyers or sellers competed to the benefit or detriment of the other. The most recent method of pricing came with the stock market, a negotiated bid-and-ask between buyers and sellers."
In other words, if you're willing to spend $100 to fly any airline from the Washington area to Los Angeles on Jan. 7 between 6 a.m. and 10 p.m., Priceline.com just may be able to find you a ride. The online company makes its money by finding a flight for less money, say $90, and pocketing the difference.
Priceline.com pretty much does the same thing with hotel rooms, new automobiles and, in New York, home mortgages. Once you agree to purchase something from Priceline.com, you are locked in to that purchase come hell or high water.
On Dec. 23, the executives at Pricline.com filed the necessary papers with the SEC to take the company public. The numbers that Ek throws around also show Priceline.com to be a smashing success.
Since the Web site opened for business in April, 1998, "we have sold more than 100,000 airline tickets," Ek says. "We're selling on average over 1,000 tickets a day. Since we launched our hotel service at the end of October, we're selling 1,000 hotel rooms a week." Virtually overnight, the Stamford-based Priceline.com has become one of the 10 largest sellers of leisure airline tickets in the country, Ek says.
So will Priceline.com change the way we buy everything?
"This process will work in any industry or any category where there exists a certain amount of brand flexibility," Ek says.
And in any industry or category that deals in products with a limited shelf life. Commerce hath no friend like a desperate seller. With the Internet, sellers can dump undesirable, unwanted merchandise such as empty airline seats instantaneously to anyone, anywhere. Priceline.com is dining out on this notion.
No matter how promising the sparkling high-glitz e-commerce seems to be, however, remember the ancient proverb: Caveat emptor.
Linton Weeks can be reached at firstname.lastname@example.org
AT HOME, WHEREVER YOU ARE
The Expat Exchange matches those interested in pre-departure information with someone already in-country. It provides weekly chats for expats and their spouses. (I am a host for the spouses chat). http://www.expatexchange.com
TCK World is for Third Culture Kids: military brats, missionary kids, Foreign Service and corporate kids, international exchange students and others who have lived as children in foreign cultures. http://www.tckworld.com
American Citizens Abroad has absentee voter information and lobbies Capitol Hill on behalf of American expats. http://www.aca.org
Centers for Disease Control lists travel inoculation requirements. http://www.cdc.gov
Federal Aviation Administration lists foreign airlines passing American safety standards. http://www.faa.gov
The Federation of American Women's Clubs Overseas is a nonprofit network of 65 clubs providing support to women living and working abroad. http://www.fawco.org
The U.S. State Department provides info on everything from passports and visas to timely travel warnings. For country-specific backgrounders try the "Online U.S. Embassy and Consulates and Other Missions" link. The services page also has links to "Overseas Schools," international marriages and international career choices.
And I edit The Art of International Living http://www.artintliving.com a new online newsletter by, for and about expatriate family members. KATE GOGGIN
MOVE OVER, ENERGIZER BUNNY ...
Found something intriguing, improbable, insane or especially useful on the Net? Write it up and send it to Joel Garreau or Robert Thomason.
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