Priceline Shows Facebook There's More Than One Way to Do Growth

NEW YORK ( TheStreet) -- For anyone still shorting Priceline.com ( PCLN), the most-chilling words out of Priceline CFO Daniel Finnegan's mouth during Thursday's fourth-quarter earnings call had to be the last thing he said before taking questions: That the company's forecast of up to 33% travel-bookings growth for early 2014 don't assume any improvement in the economy anywhere in the world.

For a company that depends on Europe as much as Priceline does, the notion that it keep growing so fast with no real consumer-spending recovery, when one is already developing, is a nice insurance policy indeed. It points to even more good times ahead for a stock that has already been a 130-bagger since 2003, as the developed world continues to climb gradually out of its post-2008 funk.

Coming a day after Facebook stunned Wall Street by paying $19 billion for WhatsApp, an instant-messaging application that has 450 million users but estimated 2013 revenue of only $20 million, Priceline's call was an espeicially timely object lesson in this: There are still aggressive, but comparatively more traditional, ways to build a growth business.

In contrast to the let's-pay-for-eyeballs approach of the WhatsApp deal, Priceline's huge returns have been rooted in smart tactics, very clever and judicious uses of its marketing and technology budgets -- and small acquisitions that paid huge returns, relatively quickly. Menlo Park,  take note.

For years, Priceline's hypergrowth has been driven by the 2005 acquisition of Netherlands-based Booking.com, a $135 million deal, almost overlooked at the time, that Priceline used to slingshot itself past Expedia, the early leader in Europe's online travel market-share war. Priceline now gets 85% of its gross travel bookings from outside the U.S. -- mostly either from Europe or Asia, which Priceline entered after buying the Thai travel site Agoda in 2007 for an estimated $150 million.

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