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Priceline inks Asian pact
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January 26, 2000: 6:48 a.m. ET
Online shopping firm lines up with Hutchison Whampoa to tap booming market
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LONDON (CNNfn) - Priceline.com Inc., operator of a "name-your-price" online shopping service, is reaching into the Asian market through an alliance with Hong Kong conglomerate Hutchison Whampoa Ltd., the companies announced Wednesday.
The alliance, Priceline's first international move, will begin by offering airline tickets via the Internet to the market of 2.6 billion people in 10 countries and Hong Kong, but notably excluding Japan.
As part of the deal, which creates a separate company, Priceline.com will license its business model to the new company and contribute its operating know-how. Hutchison provides expertise in doing business in Asia and will own a stake in the new company.
Many U.S. Internet companies are pushing into Asia, pursuing growth opportunities in the world's most populous continent. U.S. Internet investor CMGI Inc (CMGI) on Tuesday agreed a venture with Hong Kong's Pacific Century Group to form CMGI Asia.
"Any Internet company expecting to be a major world player needs to establish a significant, meaningful and long-term presence in Asian countries," Priceline Chairman and Chief Executive Richard Braddock said in a statement.
The venture will initially market its services to China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
"Hutchison's experience, size, influence and, most importantly, knowledge of the region will allow priceline.com to quickly establish operations throughout Asia on which we can build a lucrative business in the coming years," Braddock added.
Priceline said it plans to buy convertible notes that will allow it to take an equity stake of up to 50 percent in the company under certain conditions. Until then, though, it won't have a stake in the new company but will receive a licensing fee.
Priceline's system, which allows consumers to bid for products such as tickets, hotel rooms and groceries through an online auction process, is patented in the United States.
The Norwalk, Conn.- based company said it expects to report a strong first quarter. Priceline (PCLN) shares closed up 3 at 62-15/16 on Tuesday, giving it a market capitalization of $9.2 billion.
Hutchison, a $53 billion giant with holdings in telecommunications, shipping, manufacturing and real estate, has been developing its presence on the Internet. In Hong Kong trading Wednesday its shares rose HK$3.50 to HK$107.50 after the news. 
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