Priceline.com pitchman William Shatner thinks the online company's latest name-your-own-price venture is going to be really big too.
It's called The Priceline.com WebHouse Club and it will allow consumers to log on and name their own price for groceries.
Thus the company that made reverse retail famous by allowing consumers to name their own price for airline tickets, hotel rooms, and home mortgages is diving into the $660 billion grocery industry.
It's not a new idea. Online retailer Peapod (Nasdaq: PPOD) has been trying to make a go of the Internet grocery store business since 1989. Others like the Webvan Group have jumped on board. The WebHouse twist? Customers not only name their own prices but have to pick up their own packages.
That would save WebHouse an enormous expense pioneers like Peapod have had to confront. Webvan, for example, has to maintain a fleet of delivery vans.
WebHouse, an affiliate formed by Priceline, has to hope the lure of online shopping and saving a few bucks on everyday items outweighs the hassle of picking up your own items.
Like many of its Internet peers, attracting capital has been a snap for WebHouse. The Priceline.com licensee expects to raise $65 million in its first round of venture financing from Vulcan Ventures (the investment group of Microsoft cofounder Paul Allen), Wit Capital's (Nasdaq: WITC) Arista Fund, and Goldman Sachs (NYSE: GS).
The company plans to start service November 1 in the New York metro area, New Jersey, and Connecticut. Star Trek legend William Shatner will get the ad campaign rolling with a series of television commercials.
Shoppers will initially be able to name their price for products in more than 140 food categories. So far, 600 grocery stores are participating in the WebHouse network.
In exchange for licensing WebHouse its business model and providing marketing support, Priceline will receive royalties and warrants to purchase a controlling stake in the venture under certain conditions. But because Priceline won't control operations at WebHouse, its operating results won't be consolidated on Priceline's financial statements.
News to Go
Cargo carrier Atlas Air (NYSE: CGO) said it's evaluating the impact Monday's earthquake in Taiwan, Hurricane Floyd, and Typhoon York in Asia will have on operations. Flight cancellations, reroutings, and recovery costs affected 40% of Atlas's system.
Networking equipment company 3Com (Nasdaq: COMS) topped analyst estimates for its fiscal 2000 first quarter by $0.14 per share with earnings of $0.38. Strong sales of Palm Pilots and operational improvements drove earnings.
Consumer products manufacturer Unilever (NYSE: UN) is cutting out 1,200 brands from its 1,600-brand product line as part of a plan to streamline costs and improve efficiency.
Passenger airline U.S. Airways (NYSE: U) reached a tentative labor agreement with the International Association of Machinists in time to avoid a strike set for Sunday, The Wall Street Journal reported.
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