First, there was King Midas, who turned everything into gold. Now there’s Jay Walker, who turns much of what he touches into something quite the opposite. Think about Walker’s innovations over the years. They have been many, and a few have stayed golden, most notably getting Federal Express and the catalog industry together for faster shipping of products. More frequent, however, are the ones that rise to fame only to plummet to fiery disaster.
Consider the manufacturing facility Walker built in the 1980s to make electronic hi-tech sculptures at $1,200 a pop. They were featured on the cover of The Sharper Image, but the facility couldn’t keep up with demand. It was reported that Walker personally lost $2 million and wound up owing $4 million more to investors. Another wipeout was his idea to sell advertising in catalogs, because catalogers did not put ads in the proper issues or ran them in the back of their books. There was another flop with a tie-in with Comp-U-Card — now Cendant — in which catalog buyers would get $50 gift certificates for their favorite catalog every time they bought an airline ticket through CUC. More bad news with his idea of selling catalogs at newsstands for $1 to $2, because bookstores needed a UPC code on each catalog. He had the codes printed on stickers, and the test was a success. When the plan rolled out nationwide, the glue on the stickers didn’t stick, and he lost more millions.
Walker’s latest falling star is, of course, Priceline.com. Last month, the company stopped offering groceries and gasoline, posted a $2 million loss for the quarter and laid off 16 percent of its work force. Its chief financial officer resigned, and the head of its auto services business reportedly quit after she was told to dismiss half of her staff. After trading at a 52-week high of $104, Priceline’s stock was at an all-time low of $2.31 last week.
I remember hearing Walker speak at DM Days in New York in 1999 as Priceline was on its ride up, and his enthusiasm made it sound like he could — and would — sell everything online with his name-your-own-price business model. Unfortunately, the stock market is insisting on more than enthusiasm these days.