Anyone who’s ever been to Norwalk, Connecticut knows it’s a pretty good place to lie low for a while.
And even though Norwalk is a quick train ride from New York City, and got put on the dot-com map as the home base for once-and-maybe-again e-commerce standard-bearer Priceline.com (Nasdaq: PCLN), it’s never exactly been the center of the Internet universe.
That’s fitting, because lying low seems to be what Priceline is doing right now. Lying low and hoping no one notices as it retools and prepares to re-emerge, stronger, more diversified — and less likely to be made fun of for its William Shatner commercials.
When last we heard from the people at Priceline, they were trying to figure out what the heck the September 11th terrorist attacks would mean to the company’s newly discovered profitability, and trying their best to put a positive spin on a cloudy future for online travel.
Turned out things weren’t as bad as Priceline feared, but not as good as some had hoped.
Since then, Priceline has largely minded its own business. Unlike some of its noisier counterparts in the e-commerce world, the Priceline name hasn’t appeared on the newswires with promises of this outcome or news of that new feature.
It’s quiet in Norwalk, but that doesn’t mean that Priceline isn’t busy.
Priceline was already being penciled in as one of the great e-commerce turnaround stories when the terrorist attacks occurred. Now, no one is quite sure how that story, which is a compelling tale of rescue from the brink, is going to turn out.
But to its credit, Priceline is not waiting around to leave it to chance. It is again diversifying, though not quite in the same way it did back in 1999 and 2000. Back then, it was about putting the Priceline name and business model on anything that wasn’t moving.
Slapping bumper-stickers all over the place is a great way to get your garage band noticed, but it’s a lousy plan for building a business. Priceline found that out the hard way when first its gasoline and grocery services, and then everything else but its core business, fell by the wayside.
But Priceline hasn’t retracted all the way. It left one feeler out there, in the form of Priceline Mortgage. In fact, Priceline recently exercised an option to buy a 49 percent ownership stake in the mortgage company.
The timing was pretty good. Before long, investment houses were predicting that Priceline would actually see more of a boost to revenues and profits from the move than even Priceline had estimated.
Priceline made the move at the right time. With interest rates scraping bottom, refinancing and new mortgages alike are going great guns.
Out of Time
That alone isn’t enough to diversify Priceline to a point where it’s insulated from the vagaries of the travel market. Make no mistake, this is a slow season for the company, now that Thanksgiving is past and most Christmas travel is booked.
Maybe Priceline is letting Web retailers take the stage for a while during the e-tailer’s biggest test to date. Or maybe it is just so busy holding its breath and counting every penny that it doesn’t have time to make news.
Regardless, the once rosy outlook for online travel has dimmed a bit, and there are those that think Priceline is in a relatively weak position compared to some rivals in that field, anyway. It all adds up to the need to be more, again.
Proceed With Caution
The trick is to do it right this time. To reach into new markets at the right time, that is, because there’s a need for Priceline’s services — not because there are a few hundred million dollars in the bank to make it happen.
If Priceline can strike that balance, to move forward aggressively while keeping solid footing, then we can all go back to writing the next chapter in the Great Priceline Turnaround Story.
What do you think? Let’s talk about it.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.
I found Keith Regan’s article on Priceline.com interesting and insightful, and agree with his assertion that timing is extremely important.
Another important component to help ensure Priceline’s success is research–i.e., who else is out there originating mortgages online, how successful are they, and what specifically are they doing (both right and wrong)? Learning from the successes and failures of others is another important way of Priceline successfully re-inventing itself.