Microsoft cofounder Paul Allen and several other investors have taken a $55
million stake in the privately held, "name-your-price" online store
It is the third round of funding for Priceline.com, bringing the
fledgling startup's backing to more than $100 million. Priceline.com began
operations just eight months ago.
The exact sum invested by Allen and
his investment arm Vulcan Ventures was not disclosed.
Investor enthusiasm for Priceline.com comes as little surprise considering
the recent market
run-ups in Internet stocks that are well positioned to rake it
in over the holidays.
Priceline.com offers Net shoppers a "name-your-price" service that allows
buyers to bid what they would like to pay and gives sellers a chance to
consider the offers. Priceline.com lets its users bid for
airline tickets, hotel rooms,
automobiles, and soon mortgages.
In April, the firm was granted a patent
that it says covers its technology and business model, including both
the broad concepts and key functionality of buyer-driven commerce.
Priceline maintains that this is a key difference between it and its
competitors. Priceline's concept is in reverse from typical online
retailers models that list goods or services for sale. Priceline allows
buyers to list their price desired and the service try to locate sellers to
sell at that price.
For example, the advantage for the airline industry, according to
Priceline, is that nearly 500,000 airline seats fly empty every day, and
the service offers them a way to fill those seats.
Priceline joins strong competitors in this space that include online
auction sites eBay and Onsale, among others. Wall Street darling
eBay has seen tremendous growth, even despite prolonged
Vulcan Ventures is joined in this round of financing by Liberty PL, a unit of
Liberty Media, General Atlantic Partners, Quantum Industrial
Partners, and Jim Manzi, former CEO of Lotus Development.
Priceline began operations last April with $30 million in seed money. In
its second round of fiancing in August, General Atlantic partners
invested $20 million. That same month, former CitiCorp president Rick
Braddock took the helm at Priceline.com as its CEO.
Allen's firm is an investor in CNET, publisher of News.com.