NEW YORK (CNNfn) - Jay Walker, founder of Priceline.com, is stepping down from the struggling company's board of directors.|
Walker, who was once hailed as a "Thomas Edison of the Internet" for coming up with the idea for Priceline, will leave his post as vice chairman of its board of directors on Dec. 31, the company said late Thursday.
In a statement, Walker said he decided to step down from Priceline so that he could focus on business challenges facing Walker Digital, his incubator company which invented Priceline's business model.
Priceline uses an online reverse auction which allows customers to name the price they are willing to pay for a service or product. The company has come under enormous pressure recently after it issued an earnings warning and stopped offering groceries and gasoline through its service.
Shares of Priceline.com (PCLN: Research, Estimates) fell 9 cents to $1.31 in Nasdaq trade Thursday. They have fallen more than 98 percent from a high of $104.25 this year.
And Walker himself has come under fire lately, facing harsh criticism for the way he has managed the start-up companies established by Walker Digital.
Last month, Connecticut's attorney general said his office is investigating the Stamford, Conn.-based company, which has burned through hundreds of millions of dollars in failed ventures and has been accused of laying off employees without proper notice or severance pay.
When Priceline, which has its headquarters in Norwalk, Conn., reported its third-quarter earnings last month, executives said they are taking a number of steps to improve its cost structure, which will result in unspecified fourth-quarter charges against earnings. As part of the restructuring, the company is laying off about 11 percent of its 535 employees.
Executives also have blamed the company's financial troubles in part for the negative publicity that has been surrounding it in recent months.
In addition to its revenue and earnings woes, Priceline's image has been tarnished by a series of management shifts, including the departure last month of Heidi Miller as chief financial officer. Miller, formerly CFO of Citigroup, had joined the company earlier in the year.
Despite the company's financial troubles and the sharp decline in its stock price, Walker has adamantly defended Priceline's business model.
"I am proud of what has been achieved so far at Priceline.com," Walker said in the statement issued Thursday. "I have every confidence that Priceline.com will emerge from the current environment as one of the Internet's pre-eminent brands."