Forget about naming your own price in other markets.
Priceline.com (Nasdaq: PCLN) on Thursday said it will cut 48 jobs, or 11 percent of its workforce, as it indefinitely postpones previously-announced expansions into term life insurance, cell phone services and business-to-business sales. The company also announced the end of plans to work with a Softbank subsidiary to introduce Priceline.com's "Name Your Price" model in Japan.
Shares of Priceline.com rose to 1.9375 in afterhours activity on the Island electronic communications network. Priceline.com rose 0.09375 to 1.875 in Thursday's regular session, ahead of the announcement.
Thursday's announcement is merely the latest in a string of significant news for the troubled online retailer. Following a third quarter profit warning from the company, several analysts questioned whether Priceline's model would work in areas outside of the company's core travel services franchise.
Until this week's announcement, Priceline executives insisted the company could forge ahead with expansion plans, even though Priceline recently laid off employees because of anticipated slow growth.
Now Priceline plans to record fourth quarter charges for the job cuts and other moves tied to the expansion cancellations. The new business would have required "significant financial and operational burdens," the company said.
"As we said in our 3rd quarter conference call, priceline.com remains committed to building a profitable business with high customer satisfaction and long-term growth potential," said Daniel H. Schulman, president and CEO. "We also stated that we would review new businesses under strict financial criteria. As a result of those reviews, we are re-focusing all of our efforts on achieving profitability with our core businesses."
Priceline.com said it would focus on becoming more efficient, improving its website and customer service, and installing new marketing programs, including a TV campaign scheduled for the first quarter of next year.
Softbank holds a large stake in ZD Inter@ctive Investor's parent, CNet (Nasdaq: CNET).>