Priceline.com Europe, the offshoot of the troubled US internet firm which allows customers to name the price they are prepared to pay for flights, car hire and other goods and services, is to adopt a low-key approach when it launches in the UK within the next two weeks.
In a move which illustrates how internet companies are becoming more cautious about how they spend their cash - the fear of the so called 'burn rate' - the company will not proceed with a full-scale marketing campaign until the start of next year.
A large online campaign will start when the site is launched in the UK, but the company decided against paying higher offline advertising costs before Christmas. Instead it believes a so-called 'soft' launch now, aimed at attracting the early adopters, followed by a full-blown campaign in the first quarter of next year is a better use of its £10 million marketing budget.
The company also says that it has learnt from the problems suffered by some of the online banks who were inundated by swarms of internet users after they launched in a wave of publicity. A quieter approach, Priceline Europe believes, will allow it to address any teething problems early on.
Priceline Europe is a joint venture between Priceline.com, the US firm which was once valued at more than $17 billion but is now worth less than $1bn, and venture capital firm General Atlantic Partners.
The joint venture made headlines earlier this year when it pulled off a major management coup by appointing Dennis Malamatinas, the respected boss of Burger King, as its chief executive officer. At the time Malamatinas said he was attracted to the company because it was a 'genuine' idea suited to the internet.
The company has patented its own internet pricing system which allows web users to type in the price they want to pay for goods and services. The more flexible consumers are prepared to be - for instance if they are prepared to fly from a range of airports rather than any specific one - the greater the discounts.
However, despite claims by the US company's founder, Jay Walker, that Priceline's business model could be extended into any area, the business has already had to pull out of a number of ventures such as Priceline WebHouse Club, which allowed consumers to bid for cut-price groceries. A plan to launch a specialised online credit card was also dropped.
A further blow came in recent weeks when the company warned of an impending downturn in airline ticket sales, which account for more than four-fifths of its revenues.
