Or that Priceline customers often ended up paying more at auction than they could have paid through a traditional travel agent. Or that it had to buy tickets on the open market - at cost - to fulfill customers’ lowball bids, losing, on average, $30 on every ticket it sold. Few investors were concerned that in its first few quarters in business Priceline racked up losses of $142.5 million. This gave Priceline a market capitalization of $9.8 billion, the largest first-day valuation of an internet company to that date. On its first day of trading went up to $88, before settling at $69. In March 1999, Priceline went public at $16 a share. All of this succeeded in placing Priceline fifth in internet brand awareness by the end of 1998, behind only AOL, Yahoo, Netscape and Amazon. In its first six months, the company spent more than $20 million in advertising, the keystone of which was clever ads featuring Star Trek’s William Shatner. Walker intended to get to ubiquity the way Yahoo had done: by building a brand through relentless marketing. It attempted to expand into hotel bookings, car rentals, home mortgages, and Walker’s intention was to take the Priceline idea to every applicable market. By the end of 1999, it was selling more than 1,000 tickets a day. Launching in April 1998, Priceline was a dot-com “overnight success,” growing from 50 employees to more than 300 and selling more than 100,000 airline tickets in its first seven months of business. Consumers got cheaper flights airlines sold excess inventory inefficiencies were ironed out of the market and Priceline took a cut for facilitating the process: your garden-variety win-win-win-win that only the internet could make happen. Priceline offered these seats to online customers who could name the price they were willing to pay. It was founded by Jay Walker, an entrepreneur with a clever solution to a real problem: every day, 500,000 airline seats were going unsold. If you were looking for a single company that exemplified the dot-com era, you could choose. Here’s a look at one company’s rapid rise and fall - and the bubble’s lasting impact, from internet historian Brian McCullough. Daniel Fishel The successful dot-coms of the late ‘90s and early ‘00s had a few things in common: they all vowed to “change the world”, had crazy-high valuations, and were wildly unprofitable.
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