
Priceline now worth $100B - seanlinehan
https://www.google.com/finance?q=NASDAQ:PCLN
======
misterbwong
If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights,
OpenTable, and other large websites are worth 100B _combined_ , I don't think
they would even blink an eye.

Come here and the top discussion thread is about how little Priceline does,
how they're "just middlemen", and that they don't add any value.

It's clear that HN (and techies as a whole, I assume) highly discounts the
value of users, marketing, brand, and distribution.

Really is fascinating how different perspectives can be.

~~~
dopamean
In my experience in tech (only a few years, I came from finance, and before
that construction, weirdly) people are super cynical and often believe that
they know more about _any_ business because they can write some code or
something similar. I have never been around more people who consistently think
they know better than everyone else. This was a surprising thing for me
because I assumed engineers would be more curious and thusly more humble. It's
actually a really unappealing part of my experience in the industry that often
makes me wonder how long I'll last in it.

~~~
tlogan
No - it is just about age. HN readers are younger thus they think they know
more. Old people will just say: "I don't know about that" [1]

[1]
[https://www.youtube.com/watch?v=YvT_gqs5ETk](https://www.youtube.com/watch?v=YvT_gqs5ETk)

~~~
pen2l
HN _commenters_ , the more visible ones, are not that young (by young I
presume you mean anywhere in the 20s).

[https://news.ycombinator.com/leaders](https://news.ycombinator.com/leaders)

I think the median age in the top 10, for example, is around 40.

------
wheaties
This is stupid. Really. Here we are in a world where the companies that own
the assets (you know, the things that cost a lot of money) are worth less than
the things that don't own anything. This doesn't seem "right" or "fair" in the
sense that Priceline should be a middleman, unable to exercise any or all
pricing power because it does not control the assets producing the revenue. I
wonder how long this can last?

~~~
rayiner
The Internet has facilitated the age of the middleman. Owning stuff is
expensive. It's much easier to leverage network effects to tie consumers to
producers. Why make or build anything when you can control the market by
controlling the app at the end of the distribution chain?

~~~
mtgx
Wasn't the Internet supposed to _eliminate_ the middleman?

~~~
edwinnathaniel
It did when it comes to distribution channel.

A hotel can have a website where people can directly book a room.

But people want to compare prices, shops around, hence a new form of ...
middleman :D

~~~
jsight
Yeah, and they these middlemen also give hotels a way to sell lesser service
and blame the middleman. Going through the third-party often loses membership
perks and amenities and generally also makes cancellation much harder, in
exchange for a lesser rate.

If the hotel offered the lesser rate themselves, they would effectively be
pricing their "free" amenities, and they don't want to do that.

~~~
nemo44x
It's not that they "don't" want to do that - in fact they'd very much like to.
It's that they _can 't_ do it. Their agreements with listing services prohibit
this. And if they don't get listed then they simply won't get the same rate of
bookings.

Generally they are paying around 20% of the booking fee to the listing
service. So in theory the hotel would be able to charge 15% less on their own
site and make a larger profit. But if they did they would no longer get listed
on the popular sites where people go to easily price compare and then book.

~~~
coredog64
The loophole in those agreements is that the best price that listing services
show is the best "public" price. Larger hotel chains are working around that
by offering lower prices to their loyalty club members.

------
pdog
William Shatner asked for stock instead of cash when he started advertising
for Priceline.com twenty years ago. His shares are now worth $4 billion.

~~~
mercwear
I don't know if they are still his shares =)
[https://en.wikipedia.org/wiki/Priceline.com#William_Shatner](https://en.wikipedia.org/wiki/Priceline.com#William_Shatner)

------
werber
I used to code for a hotel chain, and I remember that Priceline had some sort
of weird legacy deal that made them essentially the only OTA (online travel
agent) that was able to undercut the hotel's lowest price.

~~~
lotsofpulp
It's not exclusive to Priceline, and it's called Opaque pricing:

[https://en.wikipedia.org/wiki/Opaque_travel_inventory](https://en.wikipedia.org/wiki/Opaque_travel_inventory)

Basically, in exchange for a lower price, the hotel guest gives up their right
to choose which hotel they want to stay at. And for the hotel, they get to
sell lower priced rooms without advertising lower prices, enabling them to
engage in price discrimination so they don't lose out on the people willing to
pay them more.

However, I find that the type of hotel guest Opaque pricing attracts is not a
desirable hotel guest anyway, so most decent hotels don't participate. Or if
they do, only when demand is very low and they're sitting empty.

~~~
planteen
What "kind of guest" does this attract?

I sometimes do this, especially in ski towns. I also sometimes negotiate at
rural hotels to get a fade rate. Do hotels hate me?

~~~
giarc
Not the commentor but I imagine those that are willing to find out the name of
the hotel after they pay (to save some money) are not the type of customer
that orders room service, get's spa treatments etc etc. Basically the opaque
booking customer doesn't result in upsells during their stay.

------
bflesch
Nice, who would've thought that kayak, opentable and booking were worth north
of $100Bn a couple of years ago. Kudos to the folks that made this a reality.

------
jahnu
As a European I find it amazing I hadn't even heard of this $100bn company
till now.

~~~
lobster_johnson
Aside from Booking.com, they also own KAYAK, Cheapflights, Rentalcars.com and
Open Table (the restaurant booking app).

~~~
perfectstorm
TIL.

I usually use Kayak and Booking.com (because you've the option to pay when you
checkout).

This comment made me realize that their only other major competitor is Expedia
(fun fact: Expedia originated from Microsoft).

~~~
komali2
I don't know how skyscanner continues to manage to fly under the radar. I've
never found cheaper prices on any other aggregator.

------
LynxInLA
Great timing, Acquired just did a podcast about their acquisition of
Booking.com, which has been called the “second or third best acquisition of
all-time.”

[http://www.acquired.fm/episodes/2017/7/25/episode-41-booking...](http://www.acquired.fm/episodes/2017/7/25/episode-41-bookingcom-
with-jetsetter-room-77-ceo-drew-patterson)

------
firefoxd
For the past 2 or 3 years i saw commercials of kayak on tv. Everytime I'd be
price shopping, I'd start with their website. It never worked. I couldn't
understand why they would advertise on tv and then have a broken website.

You know that page where it says it is doing the price comparison in the
background? That's where it always stopped for me. Frozen, never updating.

Last month, I was travelling again and went to kayak just to check. I get to
that page and it's frozen again. But this time i notice the little red X on
the top right corner of the browser.

> Popup blocked

I went to the next website of course, but it makes me wonder. How much money
have they lost because they decided to use pop-ups for no good reasons?

~~~
untog
There's a principle that I try to apply in situations like this: giving other
developers some credit.

By which, I mean that if every Kayak search was frozen, for every user, I
believe that the developers over there would have caught that and fixed it. If
a meaningful number of people were experiencing freeze errors, I _also_ expect
they would have caught it.

Is it possible the problem is your browser setup, and this is not an
experience other people have?

------
Kurtz79
Interesting, it seems like a company that had a very inflated valuation due to
the dot-com bubble, was hit very hard when the bubble burst and it took almost
15 years for the stock price to get back to pre-bubble level...

~~~
nobodyorother
> to get back to pre-bubble level

Do you mean "rebubble," or is there some reason Priceline should be worth
$100bn?

They do about $400-500m in profit(?) a quarter, for $1.5-2bn/year. Is it the
22% margin that's so attractive?
([https://www.google.com/finance?q=NASDAQ%3APCLN&fstype=ii&ei=...](https://www.google.com/finance?q=NASDAQ%3APCLN&fstype=ii&ei=4td4WbHRM8eI2AaNxYKACA))

Such a large margin might suggest they aren't making significant hardware
purchases or that their rates could be undercut by a competitor, both of which
would make me nervous as an investor for the long haul.

------
coldcode
When Priceline started the Execs at Travelocity laughed at them. Today
Travelocity is a brand of Expedia and just serves up Expedia content.

------
sAbakumoff
In addition to booking.com, Priceline group owns Agoda, the OTA juggernaut in
Southeast Asia.

------
miles_matthias
Wow, the stock price grew 10x in 7 years.

OpenTable & Kayak are great companies, so I'm happy to see Priceline
supporting their endeavors.

------
hatred
I am amazed. In fact, I still remember when someone told me in 2011'ish that
they are worth ~30b$; I had the same reaction.

Does anyone know how they justify their valuation? Is it mostly by acquiring
other smaller companies (Kayak etc.) and who are the other big competitors to
Priceline?

~~~
hn_throwaway_99
The main reason for Priceline's valuation is Booking.com. A lot of people tend
to think of Priceline as "that name your price airfare site", but it is really
Booking.com that is responsible for the lion's share of their valuation.

------
samfisher83
So many of the travel sites are owned by Priceline. Here is wikis list:

Booking.com Priceline.com Agoda.com Kayak.com Cheapflights Rentalcars.com
momondo OpenTable

I am surprised they haven't bought Expedia or the other major sites.

~~~
hn_throwaway_99
Newsflash: Almost all of the travel sites you've heard of are owned by Expedia
or Priceline. Priceline couldn't buy Expedia because it would get killed by
antitrust concerns. Expedia also owns Travelocity, Orbitz, Hotwire,
Hotels.com, VRBO, HomeAway, has a majority stake in Trivago, etc.

Basically the only big travel sites not owned by Expedia or Priceline are
TripAdvisor (previously spun off from Expedia) and AirBnB.

~~~
komali2
And Skyscanner! Lone little skyscanner. Still my favorite.

~~~
vmlinuz
That's Skyscanner, acquired last year by "leading Chinese online travel agent
Ctrip"?

------
forkLding
I think the reason why some people (including me) can't fathom how Priceline
can be successful is the same reason why they won't be able to start or scale
another Priceline to success

------
didip
Wow this chart and the comparison to its competitors made me see that travel
industry is humongous.

------
guelo
The stock has been on a tear this month but without any news, makes you wonder
if insiders know something.

~~~
deedorgreed
If you look at their 5 year, basically has been a tear forever.

~~~
guelo
I wouldn't say that. From 2014 until June 2016 it was basically flat.

------
z3t4
wondering how something worth 100B looks like the first link i click on the
web page returns 404

------
sdy
I have no experience in the travel industry, but I see the value in priceline
(name your price). They provide hotels a way to keep the rooms filled without
disclosing to the public the low rates. It also provides a way to reach a
different market. Source: I use priceline (name your price) at least once a
year. Pretty happy with them.

------
calt
The headline should read "Priceline Group Inc. now worth $100B"

priceline.com is pretty tiny compared to the totality of the group... Mostly
booking.com really.

~~~
dang
I think it's ok for Priceline Group Inc. to be referred to as Priceline for
short.

------
43224gg252
Why did you get downvoted? Priceline PR team?

~~~
dang
Please don't insinuate astroturfing or shillage in HN comments unless you have
evidence. The use of this as a standard (and toxic!) trope in internet
arguments is something we definitely need to stay away from. Much more at
[https://hn.algolia.com/?query=by:dang%20astroturfing&sort=by...](https://hn.algolia.com/?query=by:dang%20astroturfing&sort=byDate&prefix=false&page=0&dateRange=all&type=comment)
if anyone wants to read about HN's take on this.

We detached this subthread from
[https://news.ycombinator.com/item?id=14858440](https://news.ycombinator.com/item?id=14858440)
and marked it off-topic.

------
djakademiks
100 BIG ONES!!

I drive by their hq everyday and i can tell.

Supercars, superthots, hell i think i even seen SUPERMAN!

------
tabeth
IMO a company's "real" value is determined by how useful it would be if the
Earth had a high likelihood of complete destruction in a century. Needless to
say, Priceline would probably be worth nothing in such a scenario.

Interestingly, Google and Facebook would still be pretty useful, albeit maybe
not as much.

------
mandeepj
They should have split the stock way back like apple and google. Splitting
have its own benefits. It would have added more value to their stock price.

~~~
pilom
Why? My understanding was that the only reason Apple and Google did stock
splits was that they wanted to get onto the Dow Jones Industrial Average which
is (stupidly) price weighted and not market cap weighted so without the split,
they would have been a much larger portion of the Dow.

~~~
mandeepj
To make it affordable and easier for more people to buy their stock. This is
always the biggest reason for split. Will an average person invest in a stock
which is trading at $2k per share? Nope.

~~~
nemo44x
The average person is probably invested in their stock through a variety of
ETF's.

