Sales in airline tickets seem to have reached a plateau at a level that is nowhere near sufficient to drive significant cash flow. But airline tickets represent more than just sales to priceline. They are a great marketing tool. People may well not come to priceline to save a few dollars on groceries, but they'll come for the hundreds of dollars they can save in airline fares. Once they are familiar with the service, folks should feel more comfortable with other applications.
Trouble is, that's still a very significant percentage.
Priceline's service is expanding, the company is close to operating profitability, and it has one of the best brand names on the Internet, as Jeff Fischer reported on Tuesday . The only problem is the expectations that it has set for itself and its investors. It also appears to have set its revenue targets too high. The result is that, even though it may be a solid company, the stock is in freefall and the company is subject to ridicule. It doesn't pay to try to pull the wool over the eyes of investors.