Priceline now worth $100B • Hacker News Board

Re: Priceline now worth $100B

#91

Post by coldcode » Wed, Jul 26, 2017, 7:05 PM UTC

tiffanyh wrote: post #85

wheaties wrote: post #16

This is stupid. Really. Here we are in a world where the companies that own the assets (you know, the things that cost a lot of money) are worth less than the things that don't own anything. This doesn't seem "right" or "fair" in the sense that Priceline should be a middleman, unable to exercise any or all pricing power because it does not control the assets producing the revenue. I wonder how long this can last?

And to compound this, Sabre - which nearly everyone in the industry uses to actually get there hotel/airline/car rental inventory from only has a $6B market cap. https://www.google.com/finance?cid=55290057921840 Said another. The company technology that powers the whole travel industry is worth less than 10% of just Priceline.

Sabre is one of three. I think more of Priceline is powered by a competitor.

Re: Priceline now worth $100B

#92

Post by werber » Wed, Jul 26, 2017, 7:06 PM UTC

lotsofpulp wrote: post #22

werber wrote: post #10

I used to code for a hotel chain, and I remember that Priceline had some sort of weird legacy deal that made them essentially the only OTA (online travel agent) that was able to undercut the hotel's lowest price.

It's not exclusive to Priceline, and it's called Opaque pricing: https://en.wikipedia.org/wiki/Opaque_travel_inventory Basically, in exchange for a lower price, the hotel guest gives up their right to choose which hotel they want to stay at. And for the hotel, they get to sell lower priced rooms without advertising lower prices, enabling them to engage in price discrimination so they don't lose out on the people will…

Good to know, but I know they were on the other sites that do that, and specifically mentioned Priceline as having some sort of contract that allowed them to undercut them, and I can't find anything online to back that up.

Re: Priceline now worth $100B

#93

Post by coldcode » Wed, Jul 26, 2017, 7:06 PM UTC

When Priceline started the Execs at Travelocity laughed at them. Today Travelocity is a brand of Expedia and just serves up Expedia content.

Re: Priceline now worth $100B

#94

Post by dang » Wed, Jul 26, 2017, 7:07 PM UTC

calt wrote: post #62

The headline should read "Priceline Group Inc. now worth $100B" priceline.com is pretty tiny compared to the totality of the group... Mostly booking.com really.

I think it's ok for Priceline Group Inc. to be referred to as Priceline for short.

Re: Priceline now worth $100B

#95

Post by dang » Wed, Jul 26, 2017, 7:07 PM UTC

43224gg252 wrote: post #18

Why did you get downvoted? Priceline PR team?

Please don't insinuate astroturfing or shillage in HN comments unless you have evidence. The use of this as a standard (and toxic!) trope in internet arguments is something we definitely need to stay away from. Much more at https://hn.algolia.com/?sort=byDate&prefix=false&page=0&date... if anyone wants to read about HN's take on this.

We detached this subthread from https://news.ycombinator.com/item?id=14858440 and marked it off-topic.

Re: Priceline now worth $100B

#96

Post by adventured » Wed, Jul 26, 2017, 7:09 PM UTC

wheaties wrote: post #16

This is stupid. Really. Here we are in a world where the companies that own the assets (you know, the things that cost a lot of money) are worth less than the things that don't own anything. This doesn't seem "right" or "fair" in the sense that Priceline should be a middleman, unable to exercise any or all pricing power because it does not control the assets producing the revenue. I wonder how long this can last?

It's not stupid. They do own something, an extraordinarily valuable something. What they own is as real as a billboard company. They own as much as a catalog company (for sale aggregation) in a past era might have.

What they own is as real as anything a car insurance company owns. It's as real as crypto-currencies. It's as real as Amazon.com's store, which is now 1/2 inventory not owned by Amazon; or eBay for that matter, or any other offline auction service that has ever existed. It's as real as cloud computing.

There are dozens of other common business examples, from the present and past.

Re: Priceline now worth $100B

#97

Post by bryanculver » Wed, Jul 26, 2017, 7:10 PM UTC

wheaties wrote: post #16

This is stupid. Really. Here we are in a world where the companies that own the assets (you know, the things that cost a lot of money) are worth less than the things that don't own anything. This doesn't seem "right" or "fair" in the sense that Priceline should be a middleman, unable to exercise any or all pricing power because it does not control the assets producing the revenue. I wonder how long this can last?

While I don't completely disagree with you in the large discrepancy between the two, I believe it's a gross over-simplification to state Priceline owns nothing. In the same over-simplification you could state that newspapers are worthless as a middleman to the actual events that happen. However what you are actually accessing is talent, resources, and services to compile that list of recent events every day (or in the case of Priceline: hotels, airlines, rental cars.)

Re: Priceline now worth $100B

#98

Post by bsbechtel » Wed, Jul 26, 2017, 7:10 PM UTC

wheaties wrote: post #16

This is stupid. Really. Here we are in a world where the companies that own the assets (you know, the things that cost a lot of money) are worth less than the things that don't own anything. This doesn't seem "right" or "fair" in the sense that Priceline should be a middleman, unable to exercise any or all pricing power because it does not control the assets producing the revenue. I wonder how long this can last?

It's been this way for much of history. Middle men, such as merchants before the industrial age, were the wealthy class. They were also despised by many who thought it was 'unfair'.

Re: Priceline now worth $100B

#99

Post by scottLobster » Wed, Jul 26, 2017, 7:10 PM UTC

stcredzero wrote: post #67

rayiner wrote: post #26

Earlier quoted context omitted.

The Internet has facilitated the age of the middleman. Owning stuff is expensive. It's much easier to leverage network effects to tie consumers to producers. Why make or build anything when you can control the market by controlling the app at the end of the distribution chain?

The Internet has facilitated the age of the middleman. Owning stuff is expensive. Therefore, we should be looking for industries where connecting buyers to sellers is the big question! (Or owners to leasers, or lenders to borrowers.) We should also be looking at why apps that are supposed to do this connecting fail.

We should also be wondering about the lack of incentive to be a producer/owner when being a middleman is so comparatively lucrative. If capital and talent starts shifting to middlemen in pursuit of higher returns it could cause a lot of markets to stagnate with only the big players having the resources to make a profit off of producing.

Re: Priceline now worth $100B

#100

Post by Naga » Wed, Jul 26, 2017, 7:11 PM UTC

gordon_freeman wrote: post #69

wheaties wrote: post #16

This is stupid. Really. Here we are in a world where the companies that own the assets (you know, the things that cost a lot of money) are worth less than the things that don't own anything. This doesn't seem "right" or "fair" in the sense that Priceline should be a middleman, unable to exercise any or all pricing power because it does not control the assets producing the revenue. I wonder how long this can last?

On their wikipedia page, it states this: Total Assets: US$17.42 billion (2015) I wonder if Priceline group companies act as middlemen then how come the assets they own total to almost $18 billion? Someone can please explain. https://en.wikipedia.org/wiki/The_Priceline_Group

As per their most recent (unaudited) financial statements released May 9, 2017, they had almost $22 billion in assets. The large majority of them ($13 billion) are investments, $2.4 billion in cash and a paltry $400,000 in property plant and equipment. So from this perspective, they are really an investment company that happens to let you compare prices for things.

However, financial statements don't consider data as something of value, or brand names (unless they are purchased), so the company might be "worth" much more than this.

http://ir.pricelinegroup.com/financials.cfm