This structure has become Walker's preferred way to launch new businesses and enter new markets, as it theoretically protects Priceline stock from the impact of huge start-up costs. But the theory dramatically fell apart earlier this month when Walker personally pulled the plug on a company he had founded, another Priceline licensee, WebHouse Club. By contrast, Priceline Europe is financially protected from its U.S. namesake. The company has secured enough funding from Priceline and General Atlantic Partners to launch in multiple European markets, says Malamatinas, though he won't say how much the company has in the bank. That money will have to go a long way.
European expansion is an expensive proposition.
Crucial to Priceline Europe's success will be securing supply deals with airlines and hotel chains. We're a revenue tool for them. The airlines can put their inventory of unsold tickets into the Priceline database. And they have the right to decline a customer's bid. In Europe, a few large travel agents in each country control the supply of discounted or negotiated tickets, not the airlines themselves.