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If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights, OpenTable, and other large websites are worth 100B combined, I don't think they wou

If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights, OpenTable, and other large websites are worth 100B combined, I don't think they would even blink an eye. Come here and the top discussion thread is about how little Priceline does, how they're "just middlemen", and that they don't add any value. It's clear that HN (and techies as a whole, I assume) highly discounts the value of users, marketing, brand, and distribution. Really is fascinating how different perspectives can be.

famil 9y ago
> how they're "just middlemen" As are Uber/AirBnb and internet advertising giants Google and Facebook.
sliverstorm 9y ago
HN might also be aware of the market caps of the airlines Priceline books for: Delta: 34.4B Southwest: 30.2B American: 22.1B United: 18.7B Are we incorrectly discounting marketing, brand, etc when we notice that the top booking service is valued triple the top actual provider? That the value they add might not actually be triple the value of the actual flight?
- inthewoods 9y ago
  Flights are only part of the picture - hotels, car rentals, et al. Anything, basically, to do with travel.
- acchow 9y ago
  Margins on flights are slim. Hotel bookings are the real meat.
- hn_throwaway_99 9y ago
  This is a common misconception based on Priceline's history. The vast, vast majority of Priceline's value is Booking.com, which does hotel bookings. The margins on flight bookings are razor thin and probably only add value by enabling travelers to add hotels to their flights.
jimmykennedy 9y ago
"just middlemen" == abstracting away complexity All you have to do is reword it in programmer talk and HN gets it.
- deleted 9y ago
  [deleted]
xrange 9y ago
>If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights, OpenTable, and other large websites are worth 100B combined, I don't think they would even blink an eye. ...is that because you don't think non-HNer's don't have an appreciation for how much something like Walmart is worth (~$250B)? Or because you think they believe that $100B is a reasonable valuation? >Really is fascinating how different perspectives can be. My personal experience is that "most people" wouldn't recognize that Kayak, Booking, CheapFlights, and OpenTable were businesses / websites, let alone use them.
- 1zee 9y ago
  You know people that would not recognize any of those brands?
  - wott 9y ago
    I only know Booking (never used it personally, but my relatives do; well... did, I think they stopped for ethical reasons: the 'middlemen' thing), I've never heard of any of the others and I have no idea about what they provide.
  - ksk 9y ago
    I recently met an older dude who hadn't heard of Craigslist!
    - vwcx 9y ago
      There are all kinds of people who have never heard of Craigslist within the United States. There are also plenty of children under 18 who have never heard of Craigslist. Despite its popularity and relative staying power, Craigslist belongs/belonged to a specific sub-generation.
  - frgtpsswrdlame 9y ago
    Plenty.
  - titanix2 9y ago
ozim 9y ago
I don't need 99% of software written in the world. Then I know 80% of everything is crap. Try to sell me something I will be polite but some people are not. I am tech guy but when I think of above I know I need salesman so he sell stuff that I build. Also you cannot scale sales infinitely so having middleman and getting 5% and not having middleman and getting 0 is win situation.
Urbanxassassin 9y ago
And yet priceline has screwed my work/personal trip bookings left and right.
dopamean 9y ago
In my experience in tech (only a few years, I came from finance, and before that construction, weirdly) people are super cynical and often believe that they know more about _any_ business because they can write some code or something similar. I have never been around more people who consistently think they know better than everyone else. This was a surprising thing for me because I assumed engineers would be more curious and thusly more humble. It's actually a really unappealing part of my experience in the industry that often makes me wonder how long I'll last in it.
- camhenlin 9y ago
  Seasoned programmers who have worked on software across several industries are probably pretty good at understanding and translating day to day business tasks into automated code. To do that you almost have to understand a business inside and out. That's their job. If more people were humble, less would get done
  - dopamean 9y ago
    That make's plenty of sense but I have a hard time believing that so many of the commenters here have the experience you just described. I know it is certainly not true of the people I interact with offline on a regular basis. Also, I'm not sure I really buy the argument that because you can automate some "day to day business tasks" means you know better about how a business should be run. Automating a process that already exists is not the same as deciding which processes need to exist and which don't. Certainly, there are people who can both but I'd be lying if I said any significant number of engineers I know could really do both.
    - nine_k 9y ago
      Humble is opposite to arrogant, not to decisive or knowledgeable. See also: Dunning-Kruger effect.
    - GFischer 9y ago
      Honestly, I've seen so many truly awful managers that I'd trust that the engineers "know better about how a business should be run"... from an operational standpoint. However, there's the magical "sales" and "public relations" side which those same awful (operationally) managers usually excel at. When those managers have a strong CIO or operations guy by their side they're a killing team, but I've seen cases where they get sweet-talked by an atrocious ignorant CIO (and they can't see it because they're not knowledgeable themselves). I've also seen strong, well rounded CEOs... and many were engineers transitioned to management roles (with MBAs, etc).
michaelmrose 9y ago
They are priced almost 50 times their earnings do they really have that much room to grow in the next several years?
- kolbe 9y ago
  I have serious doubts they have any room to grow. Seems like their entire business model depends on retaining monopoly pricing power in industries with very few barriers to entry.
  - hn_throwaway_99 9y ago
    > retaining monopoly pricing power in industries with very few barriers to entry. Few barriers to entry, really?? Sorry, but this sounds a bit like an inexperienced developer saying "Hey, I could build most of Facebook's functionality in 2 weeks." Booking.com is THE largest spender of advertising on Google. They have giant teams that A/B test the living shite out of every pixel on their screens, and huge teams of data scientists squeezing out every last bit of optimization on their site. It's a huge barrier to entry. This answer from Quora's CEO explains it well: https://www.quora.com/What-are-some-important-internet-companies-we-seldom-hear-about/answer/Adam-DAngelo https://www.quora.com/What-are-some-important-internet-compa...
deleted 9y ago
[deleted]
drinkzima 9y ago
Really it's booking.com is worth ~$95B and the rest of those brands combined are worth ~$5B (OpenTable just got written down from an accounting perspective). There is a huge general misunderstanding in the profitability of directing hotel bookings vs flight bookings or other types of travel consumables. Rate parity and high commission rates mean that directing hotel rooms is hugely profitable and Expedia (hotels.com, trivago, expedia) and Priceline (booking.com) operate as a duopoly in most markets. They are both marketing machines that turn brand + paid traffic into highly profitable room nights.
- didibus 9y ago
  I wonder how much the domain name played in their favor. I recon expedia is older and I'm surprised how far behind they're valuation is to priceline. (Or maybe I'm reading valuation wrong).
- raphtheb 9y ago
  To corroborate your statement, i worked at Booking ~4 years ago, and the internal rumours were that Booking represented ~85% of the PCLN value. I'm sure it fluctuated since, and from friends still working there, i would guess upwards.
- eldavido 9y ago
  To further corroborate, I'm working in hotel software at the moment and these sites drive a _ton_ of traffic. 10-15% commissions on every booking they process. booking.com is such a piece of shit in so many ways: strip-mall aesthetics, horrible data quality (firsthand knowledge here), huge commissions for hotels, and yet, it's a fantastic business. Probably a good lesson or two here.
  - jpetso 9y ago
    Usability on booking.com is decent, search, filters and map view are useful. Things have been getting better elsewhere, so it probably doesn't stand out as much as it did years ago. Either way, if prices are roughly the same on most sites, I'll go for something that just lets me get the job done. I couldn't care less about aesthetics and commissions if other places can't give me a much better discount while also not getting me angry using their site.
neerkumar 9y ago
In fairness, it also comes from the fact that booking is especially huge in Europe. So it is hard for a very US based audience like HN to realize how big they are. It is like Whatsapp. 60 billion messages a day, but it doesn't look that big from the US.
awkwarddaturtle 9y ago
> If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights, OpenTable, and other large websites are worth 100B combined, I don't think they would even blink an eye. Really? I think most people would be shocked. > It's clear that HN (and techies as a whole, I assume) highly discounts the value of users, marketing, brand, and distribution. That isn't what give pcln "value". The value is just a reflection of the boom stock market and a handful of hedge funds/etc bidding up the price of the stock. Once the recession starts and a few of the hedge funds decide to cash out, the "value" could shrink considerably.

famil 9y ago

> how they're "just middlemen" As are Uber/AirBnb and internet advertising giants Google and Facebook.

sliverstorm 9y ago

HN might also be aware of the market caps of the airlines Priceline books for: Delta: 34.4B Southwest: 30.2B American: 22.1B United: 18.7B Are we incorrectly discounting marketing, brand, etc when we notice that the top booking service is valued triple the top actual provider? That the value they add might not actually be triple the value of the actual flight?

inthewoods 9y ago
Flights are only part of the picture - hotels, car rentals, et al. Anything, basically, to do with travel.
acchow 9y ago
Margins on flights are slim. Hotel bookings are the real meat.
hn_throwaway_99 9y ago
This is a common misconception based on Priceline's history. The vast, vast majority of Priceline's value is Booking.com, which does hotel bookings. The margins on flight bookings are razor thin and probably only add value by enabling travelers to add hotels to their flights.

jimmykennedy 9y ago

"just middlemen" == abstracting away complexity All you have to do is reword it in programmer talk and HN gets it.

deleted 9y ago
[deleted]

xrange 9y ago

>If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights, OpenTable, and other large websites are worth 100B combined, I don't think they would even blink an eye. ...is that because you don't think non-HNer's don't have an appreciation for how much something like Walmart is worth (~$250B)? Or because you think they believe that $100B is a reasonable valuation? >Really is fascinating how different perspectives can be. My personal experience is that "most people" wouldn't recognize that Kayak, Booking, CheapFlights, and OpenTable were businesses / websites, let alone use them.

1zee 9y ago
You know people that would not recognize any of those brands?
- wott 9y ago
  I only know Booking (never used it personally, but my relatives do; well... did, I think they stopped for ethical reasons: the 'middlemen' thing), I've never heard of any of the others and I have no idea about what they provide.
- ksk 9y ago
  I recently met an older dude who hadn't heard of Craigslist!
  - vwcx 9y ago
    There are all kinds of people who have never heard of Craigslist within the United States. There are also plenty of children under 18 who have never heard of Craigslist. Despite its popularity and relative staying power, Craigslist belongs/belonged to a specific sub-generation.
- frgtpsswrdlame 9y ago
  Plenty.
- titanix2 9y ago

ozim 9y ago

I don't need 99% of software written in the world. Then I know 80% of everything is crap. Try to sell me something I will be polite but some people are not. I am tech guy but when I think of above I know I need salesman so he sell stuff that I build. Also you cannot scale sales infinitely so having middleman and getting 5% and not having middleman and getting 0 is win situation.

Urbanxassassin 9y ago

And yet priceline has screwed my work/personal trip bookings left and right.

dopamean 9y ago

In my experience in tech (only a few years, I came from finance, and before that construction, weirdly) people are super cynical and often believe that they know more about _any_ business because they can write some code or something similar. I have never been around more people who consistently think they know better than everyone else. This was a surprising thing for me because I assumed engineers would be more curious and thusly more humble. It's actually a really unappealing part of my experience in the industry that often makes me wonder how long I'll last in it.

camhenlin 9y ago
Seasoned programmers who have worked on software across several industries are probably pretty good at understanding and translating day to day business tasks into automated code. To do that you almost have to understand a business inside and out. That's their job. If more people were humble, less would get done
- dopamean 9y ago
  That make's plenty of sense but I have a hard time believing that so many of the commenters here have the experience you just described. I know it is certainly not true of the people I interact with offline on a regular basis. Also, I'm not sure I really buy the argument that because you can automate some "day to day business tasks" means you know better about how a business should be run. Automating a process that already exists is not the same as deciding which processes need to exist and which don't. Certainly, there are people who can both but I'd be lying if I said any significant number of engineers I know could really do both.
  - nine_k 9y ago
    Humble is opposite to arrogant, not to decisive or knowledgeable. See also: Dunning-Kruger effect.
  - GFischer 9y ago
    Honestly, I've seen so many truly awful managers that I'd trust that the engineers "know better about how a business should be run"... from an operational standpoint. However, there's the magical "sales" and "public relations" side which those same awful (operationally) managers usually excel at. When those managers have a strong CIO or operations guy by their side they're a killing team, but I've seen cases where they get sweet-talked by an atrocious ignorant CIO (and they can't see it because they're not knowledgeable themselves). I've also seen strong, well rounded CEOs... and many were engineers transitioned to management roles (with MBAs, etc).

michaelmrose 9y ago

They are priced almost 50 times their earnings do they really have that much room to grow in the next several years?

kolbe 9y ago
I have serious doubts they have any room to grow. Seems like their entire business model depends on retaining monopoly pricing power in industries with very few barriers to entry.
- hn_throwaway_99 9y ago
  > retaining monopoly pricing power in industries with very few barriers to entry. Few barriers to entry, really?? Sorry, but this sounds a bit like an inexperienced developer saying "Hey, I could build most of Facebook's functionality in 2 weeks." Booking.com is THE largest spender of advertising on Google. They have giant teams that A/B test the living shite out of every pixel on their screens, and huge teams of data scientists squeezing out every last bit of optimization on their site. It's a huge barrier to entry. This answer from Quora's CEO explains it well: https://www.quora.com/What-are-some-important-internet-companies-we-seldom-hear-about/answer/Adam-DAngelo https://www.quora.com/What-are-some-important-internet-compa...

deleted 9y ago

[deleted]

drinkzima 9y ago

Really it's booking.com is worth ~$95B and the rest of those brands combined are worth ~$5B (OpenTable just got written down from an accounting perspective). There is a huge general misunderstanding in the profitability of directing hotel bookings vs flight bookings or other types of travel consumables. Rate parity and high commission rates mean that directing hotel rooms is hugely profitable and Expedia (hotels.com, trivago, expedia) and Priceline (booking.com) operate as a duopoly in most markets. They are both marketing machines that turn brand + paid traffic into highly profitable room nights.

didibus 9y ago
I wonder how much the domain name played in their favor. I recon expedia is older and I'm surprised how far behind they're valuation is to priceline. (Or maybe I'm reading valuation wrong).
raphtheb 9y ago
To corroborate your statement, i worked at Booking ~4 years ago, and the internal rumours were that Booking represented ~85% of the PCLN value. I'm sure it fluctuated since, and from friends still working there, i would guess upwards.
eldavido 9y ago
To further corroborate, I'm working in hotel software at the moment and these sites drive a _ton_ of traffic. 10-15% commissions on every booking they process. booking.com is such a piece of shit in so many ways: strip-mall aesthetics, horrible data quality (firsthand knowledge here), huge commissions for hotels, and yet, it's a fantastic business. Probably a good lesson or two here.
- jpetso 9y ago
  Usability on booking.com is decent, search, filters and map view are useful. Things have been getting better elsewhere, so it probably doesn't stand out as much as it did years ago. Either way, if prices are roughly the same on most sites, I'll go for something that just lets me get the job done. I couldn't care less about aesthetics and commissions if other places can't give me a much better discount while also not getting me angry using their site.

neerkumar 9y ago

In fairness, it also comes from the fact that booking is especially huge in Europe. So it is hard for a very US based audience like HN to realize how big they are. It is like Whatsapp. 60 billion messages a day, but it doesn't look that big from the US.

awkwarddaturtle 9y ago

> If you were to tell a non-HNer that Kayak, Booking, Priceline, CheapFlights, OpenTable, and other large websites are worth 100B combined, I don't think they would even blink an eye. Really? I think most people would be shocked. > It's clear that HN (and techies as a whole, I assume) highly discounts the value of users, marketing, brand, and distribution. That isn't what give pcln "value". The value is just a reflection of the boom stock market and a handful of hedge funds/etc bidding up the price of the stock. Once the recession starts and a few of the hedge funds decide to cash out, the "value" could shrink considerably.