Priceline.com replaces CEO with its former leader
In an effort to shake up its sluggish financial performance, online name-your-own-price company Priceline.com Inc. announced yesterday that it's bringing back its first CEO as part of a management reshuffle.
Former CEO and present board chairman Richard Braddock, 59, who served as CEO from July 1998 to May 2000, will replace outgoing president and CEO Daniel Schulman, according to a company announcement. Schulman, 43, joined Priceline.com in June 1999 from AT&T Corp. He was replaced after the board of directors concluded that it was "in the best interests of Priceline.com and its shareholders."
A spokesman for the Norwalk, Conn.-based company had no comment today when asked for further details about the board's action.
Last May, Schulman was promoted to the posts of president and CEO, succeeding Braddock.
In November, the company announced a series of restructuring moves and the layoff of 16%, or 90, of its 535 workers. A month later, another 48 workers were laid off and several proposed name-your-own-price services were postponed.
Then, in February, Priceline.com announced disappointing fourth-quarter losses that were twice as large as analysts expected. Including all charges, the company reported a net loss of $105.1 million for the fourth quarter, with revenue of $228.2 million. The revenue was up 35% from the year-earlier level of $169.2 million but well below the $341 million the company chalked up in 1999.
Jim Williamson, an analyst at IDC in Framingham, Mass., said Priceline's move was no a surprise.
"It's a fairly typical response for a public company that's obviously having trouble with its stock price," Williamson said. "I think it's probably a response ... to make their investors happy."
As part of its management changes, the company also named Chief Operating Officer Jeffery Boyd as president. Boyd, 44, was named COO last October.
Braddock, who will keep his chairman's post, came to Priceline.com from True North Communications Inc., where he was a nonexecutive chairman. He previously was CEO of Medco Containment Services and held a variety of positions at Citicorp and its principal subsidiary, Citibank NA, including president and COO.
"Rick has been instrumental in building Priceline.com and has helped define and guide the company's strategic direction through its turnaround efforts," said N.J. Nicholas Jr., a Priceline.com director, in the statement. "His broad business experience will be invaluable as Priceline.com pursues growth and profitability."
In a statement, Braddock said he is "enthusiastic about the improvements in our business as our turnaround plan continues to unfold," adding that he is "confident that we will accomplish our guidance for revenue and achieve pro forma operating profitability in the second quarter 2001."
Priceline.com sells airline tickets, hotel rooms and rental cars at discount prices and offers home mortgage and refinancing services, new-car buying programs and other services.
» posted by ITworld staff
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