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Ms. Marryan Keller, a famous automotive analyst, was appointed the president of Automotive Services unit of Priceline. com on July 1, 1999. But right after she took the office, the stock price of the company begun to fall down from the highest $165 in May. In early November it dropped to under $60. The price of today is $52 and 5/8, one third of the price a half year ago. |
Priceline company was established last year. It is only one year and a few months old company. It has the patented internet pricing system where consumers name their own price for goods and services. Priceline.com takes consumer offers and then presents them to sellers who can fill as much of that demand as they want at price points determined by buyers. The company electronically collects consumer demand, it fills this demand directly with sellers or by using proprietary databases. Based on this patent, it started a travel service that offers leisure airline tickets and hotel rooms. As they got a confidence that their travel business were going well, they tried to have automotive business from this spring. After Ms. Marryan Keller joined the company in July, it started the new car buying service on a bigger scale.
Ms. Keller was said to be the opinion of that automotive dealers were gaining too much profits and that consumers would be able to get cars at much less costs. Furthermore she has criticized the so-called one price deal because she believed that voluminous products should be priced at the market so that their pricing must be flexible. She said also that on line automotive traders such as the Autobytel.com would fade away because they cannot get guaranteed income on trade. I quite agree with her opinions.
The company has its promising future based on its patent. If the right of patent is denied at the court, the company will lose its superiority and will become "one of them" company.
There has been long arguments about how to protect invisible discoveries such as business processes not only in U.S.A. but in Japan. Some of them insisted no need to protect the invisible inventions by the government because only visible inventions can be said as discoveries. Some said that the invisible inventions should be protected as copy right not by patent. Some eterprisers are of the opinion that they are protected by patent. Before they get any consensus on the matter, the U.S.A. Patent Office approved patents on these invisible discoveries. Microsoft company established a subsidiary September 8, 1999 to do hotel room reservation service just like Priceline does. This is a challenge against Priceline's patent right. Bill Gates told reporters that those who tried to make walls on our way must be diminished. Priceline sued Microsoft for patent infringement. This is one of the reasons why its stock price fell down sharply.
The Automotive Unit of Priceline, which started their business limited to Manhattan, New York area, is now making its foundation secure under the leadership of president Keller. She made a partnership agreement with AutoNation on July 27, 1999, recruited a top executive of North American Nissan as a vice president and general manager of the Automotive Unit on August 18, 1999, and Budget Rent a Car joined Priceline.com network on September 27, 1999. On October 12, 1999, the company licensed patented business model to Alliance. She added business areas step by step such as Connecticut, New York, Vermont and four states in New England and west of Pennsylvania and south of California. The unit is said to cover the one third of U.S. market.
President Keller announced on November 3, 1999 top 10 new car model sold in October through Priceline. com as follows (She added SUV to her list from October):
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She commented "The Honda Odyssey was our best-selling vehicle in October as dealer supply caught up with consumer demand." Added Keller: "Our top ten list also continues to diversify as we enter new markets. This month's list includes four SUVs, four cars and two minivans. Two of the vehicles are from domestic manufacturers, which until our recent market expansions had been under-represented in our top ten list"(The above list and Keller's comments are from Priceline.com News Release-November 3, 1999.)
I am expecting President Marryann Keller's efforts resulting in gaining reliance from both of buyers and sellers and in consolidating their business foundation at the automotive market disregarding the result of patent issue.