With all the practice it's gotten recently,
is really getting into the swing of this put-a-positive-spin-on-bad-news thing.
In a press release optimistically headlined "Priceline.com Announces Next Steps in Strategic Plan," the company said it called off plans to get into three new business lines, won't launch a Japanese site and is firing 48 people, or about 11% of its workforce. All of those "next steps," combined with priceline's previous actions, will result in an as-yet-undisclosed fourth-quarter charge.
"The steps taken today will relieve the company of the significant financial and operational burdens of launching these new businesses and are part of a broader program to build priceline.com's momentum," the company said in a statement. It said it would indefinitely put off implementing business-to-business, life insurance and cellular telephone services.
That leaves priceline as primarily a travel services company (though it still offers long distance services, home finance, and new car sales). And at its closing share price of $1.88, or about 0.25 times sales, it actually looks pretty cheap compared to other online travel companies like
(0.48 times sales),
(1.38 times sales) and
(2.48 times sales).
The question, then, is how priceline stacks up to these rivals -- will lower prices make up for its relative inconvenience? -- and also how all of these independent online travel companies fare in the face of new competition from
, a pet project of some of the major airlines. It's too soon to tell, but priceline has certainly lost some serious mo this autumn.
In the last few months, it warned that it wouldn't meet revenue growth due to slower airline ticket sales. Its
grocery licensee -- which was privately held but served as a symbol of priceline's ability to extend its name-your-own price model to a broad swathe of goods and services -- couldn't get enough funding to continue. Its high-profile CFO, Heidi Miller, jumped ship for more stable ground. And most recently, priceline founder Jay Walker's personal idea lab,
, laid off staff and said it would stop funding three startups.
priceline investors have had it similarly bad. The company's shares have lost more than 90% of their value since the first bad news hit in late September, and are at a tiny fraction of their 52-week high of $104.25. Its stock traded at $1.94 in after hours trading on
, suggesting that investors think the company's newly honed focus will help it cut costs and reach profitability sooner. Either that, or there's nowhere to go but up.