BUSINESSWEEK ONLINE : SEPTEMBER 27, 1999 ISSUE
COVER STORY -- E.BIZ -- THE E.BIZ 25

Jay S. Walker


JAY S. WALKER

PRICELINE.COM

Position: Founder and vice-chairman

Contribution: Shook up the world of online sales by letting consumers name the price they'll pay for airplane tickets, hotel rooms, and cars.

Ambition: Extend the priceline.com approach to a universe of consumer products.

A Q&A with Jay Walker is available at ebiz.businessweek.com
For a glimpse inside Jay S. Walker's universe, walk into his Stamford (Conn.) office. It looks like a rich man's playpen: On the wall are Nixon's letter of resignation to Henry Kissinger and four flags that went to the moon, along with man-size models of Star Wars' Yoda and Boba Fett characters. Diapers, detergent, and tins of tuna crowd the shelves--pointing to a future foray for priceline.com (PCLN), the Web site that sells air tickets, cars, hotel rooms, and loans. What else does a billionaire want? Escape from earth, of course. ''Space is one of the great frontiers,'' says Walker, 43, echoing Star Trek actor and now priceline.com spokesman William Shatner. ''I'd love to go on a shuttle to the moon.''

For the right price, maybe he will. Since priceline.com made its debut 17 months ago, Walker's name-your-own-price system has turned commercial logic on its head. It proves that, for the right savings, people will buy something without knowing the brand or, in the case of airline tickets, without knowing when their flight takes off. In Walker's world, the buyer writes the price tag. There's a competing group of sellers, whose prices are matched against it by priceline.com.

ME-TOO SITES. At first, there weren't enough matchups--so priceline.com sometimes discounted prices below costs to make deals happen. But ultimately, Walker persuaded more than 2 million people to sign up for goods over the Web. In the process, he's forcing traditional businesses to rethink their pricing model and spawning imitators, including buyingedge.com and NexTag.com.

Now, Walker is extending the approach to fresh fields. Although he won't disclose the next items up for bid--simply smiling at the household products perched on his shelves--Walker sees no end to his potential offerings. ''Even in lifesaving medicines, people will be flexible to save money,'' he says.

How far he can stretch the concept is unclear, but priceline.com is off to a rousing start. In one year of business, revenues shot to $111.6 million in the quarter ended June 30, up from $49.4 million for the previous three months. That still meant an operating loss of $16.2 million, but the losses have shrunk from $17.6 million and $73.9 million in the prior two quarters, and analysts see profits by the middle of next year. Walker's winning ways look sustainable: He has received two patents at priceline.com and has applications in on 20 more. ''This is a truly unique platform that can be transferred across product lines,'' says analyst Ryan B. Alexander of Wit Capital Corp.

Walker wants to repeat his formula in dozens of markets. ''What many people who are affluent fail to appreciate is that most of the world is on a budget,'' says Walker. And where does this bargain-hunting billionaire expect his business to go? Straight to the moon.

By Diane Brady

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[empire builders]
Jeffrey P. Bezos
AMAZON.COM INC.

Stephen M. Case
AMERICA ONLINE INC.

Timothy A. Koogle
YAHOO! INC.

[the innovators]
Louis H. Borders
WEBVAN GROUP INC.

Jay S. Walker
PRICELINE.COM

Margaret C. Whitman
EBAY INC.

Glen Meakem
FREE MARKETS ONLINE INC.

James H. Clark
MYCFO INC.

Christos M. Cotsakos
E*TRADE GROUP INC.

[bankrollers]
Masayoshi Son
SOFTBANK CORP., JAPAN

Robert C. Kagle
BENCHMARK CAPITAL

Lawton W. Fitt
GOLDMAN SACHS & CO.

L. John Doerr
KLEINER PERKINS CAUFIELD & BYERS  

Bernard Arnault
LVMH MOET HENNESSY
LOUIS VUITTON  

[the visionaries]
Mary G. Meeker
MORGAN STANLEY DEAN WITTER

John Hagel III
MCKINSEY & CO.

William Joy
SUN MICROSYSTEMS

[the architects]
Louis V. Gerstner Jr.
IBM CORP.

Pehong Chen
BROADVISION INC.

David C. Peterschmidt
INKTOMI INC.

Kevin J. O'Connor
DOUBLECLICK

Ellen M. Hancock
EXODUS COMMUNICATIONS

[the pace setters]
David S. Pottruck
CHARLES SCHWAB CORP.

John T. Chambers
CISCO SYSTEMS

Michael S. Dell
DELL COMPUTER



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