But Jay Walker isn’t whimpering. He still believes.
Most of all he believes in the Web. Cheerfully taking a seat at the conference table at the offices of Walker Digital–the hot spot where, in palmier days, he and his nerdy lieutenants would brainstorm new businesses, patent the plans and wait for IPOs to sprout like turnips–Walker enthusiastically notes that the Net hasn’t come close to peaking. “The Internet is going to get more valuable to the business world, the social world and the governmental world as time moves on. The speed of that increase probably isn’t going to slow.” What’s changed, of course, is the sudden realization by investors that companies still seeking profits should be valued more highly than General Motors, and a reluctance to mindlessly provide capital, and eventually an IPO, to anybody wandering into a venture capitalist’s office with a Web site, a vision and a buzzword. “I would say that the valuation of certain companies at various times was disconnected from the underlying fundamentals of the business,” Walker says. (You mean Priceline, which sells around 4 percent of all airline tickets, wasn’t worth more than all the major carriers combined?) “There was an entire sector of the economy where people were not distinguishing what is a real business and simply an empty promise.”
And what about those poor (well, poorer) souls who bought Priceline when its stock flew at 30,000 feet–and now are trying to stay alive just above tree level? “If you were betting [as opposed to] investing, then the bets didn’t work well,” Walker says. “If you were investing, then in theory you made a value judgment about the long-term value, and you were happy with the price you paid. We never said anything about how the market was going to go in the short term. This isn’t going to be a perfect straight line. We never said it was.”
Of course, on paper at least, no Priceline shareholder lost more than Jay Walker. But don’t cry for him. “If it were that or my kid being sick, I’d lose the paper wealth in a heartbeat. When I started Priceline, I had over $100 million of personal net worth. You can’t spend more. This was a chance to build something of great enduring legacy. How many times do you get a chance to do that?” To be sure, losing enough money to finance a George W. Bush tax cut, he says, “is a terrible disappointment, but let’s see if I’ve built the right long-term business. So it’s a disappointment, but not the end of the world.”
In a way, for Jay Walker and Priceline it’s a new beginning. With the giddy distraction of all the billions now gone, it’s time to prove just what “name your own price” is really worth.
