Prospectus Summary
YOU SHOULD READ THIS SUMMARY TOGETHER WITH THE MORE DETAILED INFORMATION AND COMBINED FINANCIAL STATEMENTS AND RELATED NOTES THERETO APPEARING ELSEWHERE IN THIS PROSPECTUS, INCLUDING THE INFORMATION UNDER "RISK FACTORS." UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS (I) REFLECTS THE CONVERSION OF ALL OUTSTANDING SHARES OF OUR CONVERTIBLE PREFERRED STOCK INTO 31,126,184 SHARES OF COMMON STOCK UPON THE CONSUMMATION OF THIS OFFERING; (II) REFLECTS THE CONSUMMATION OF THE MERGER BETWEEN PRICELINE.COM AND PRICELINE TRAVEL, INC. PRIOR TO THE CONSUMMATION OF THIS OFFERING; AND (III) ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION WILL NOT BE EXERCISED. SEE "DESCRIPTION OF CAPITAL STOCK" AND "UNDERWRITERS."
THE COMPANY Priceline.com has pioneered a unique new type of e-commerce known as a "demand collection system" that enables consumers to use the Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Using a simple and compelling consumer proposition--"name your price," we collect consumer demand (in the form of individual customer offers guaranteed by a credit card) for a particular product or service at a price set by the customer and communicate that demand directly to participating sellers or to their private databases. Consumers agree to hold their offers open for a specified period of time to enable priceline.com to fulfill their offers from inventory provided by participating sellers. Once fulfilled, offers generally cannot be canceled. By requiring consumers to be flexible with respect to brands, sellers and/or product features, we enable sellers to generate incremental revenue without disrupting their existing distribution channels or retail pricing structures. We commenced the priceline.com service on April 6, 1998 with the sale of leisure airline tickets and, during the period from launch through September 30, 1998, collected guaranteed offers for approximately 1.1 million airline tickets, representing approximately $243.9 million in total consumer demand, resulting in sales of approximately 67,275 airline tickets, representing approximately $15.5 million in revenue. We expanded the priceline.com service to include the sale of new automobiles, on a test basis, in July 1998 and hotel room reservations in October 1998. During the first quarter of 1999, we expect to offer home mortgages. We also intend to expand our product offerings over the next two years to include other leisure travel products, other financial services products and certain retail products.
Our seller participants include 16 domestic and international airlines and several nationally recognized hotel chains. We believe that the priceline.com service already has achieved significant consumer acceptance and widespread brand awareness. An independent research study conducted for us found that, among adult Americans, the priceline.com "name your price" business proposition was the second most recognized e-commerce brand among the 13 leading brands included in the survey.