During a time when Facebook Inc. (NASDAQ:FB) wants to prove it is still a growth company, it stuns Wall Street with the $19 billion acquisition of instant-messaging application WhatsApp. While the purchase brought along 450 million users, the main reason for the buy is for an additional revenue stream, but that was only $20M.
On the other end of the spectrum, Priceline.com Inc. (NASDAQ:PCLN) has already shown a 33% growth trajectory in travel bookings for the early part of 2014. This comes at a time when the global economy is still on rocky ground, very slowly climbing out of the remnants of the great recession.
While Facebook pays large chunks of money for new businesses, Priceline has continued to move forward with smaller acquisitions and intelligent marketing. In fact, it is still profiting from its 2005 purchase of Booking.com for $135 million, which skyrocketed it past Expedia Inc. (NASDAQ:EXPE). Prior to 2005, Expedia was the market leader for online travel bookings, most notably within the European market. In 2007, Priceline bought Thai travel site Agoda for $150 million. As a result, Priceline receives 85% of its bookings from outside the U.S.
Priceline also intelligently leveraged its use of online advertising (once called the “King of Google Adwords”), and it maximized relationships with thousands of hotels to give its users the most cost-efficient and attractive deals. Priceline focuses on offline advertising as well, augmenting its budget from $92 million to $127.5 million, and part of that will be used to market the Booking.com brand. Priceline’s TV spots are both memorable and quirky.
What Facebook can take note of is Priceline’s investment in its own brand, as opposed to purchasing brands that don’t have as much recognition. Not only has Priceline had to spend less, in that regard, but it also continues to boost its valuation and consumer base in the process.
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