Which part of transactions handled by an Internet middleman should be considered its own revenue?
Which part of transactions handled by an Internet middleman should be considered its own revenue?
Priceline.com developed an innovative Internet service that allowed consumers to propose the price they wanted to pay for travel. The process involved two steps: Priceline first bought the ticket at the airline's bid price, then resold the ticket to the consumer at his or her bid price. Priceline.com pocketed the difference between the bids. Later, Priceline added price-disclosed services, allowing consumers to search for discounted travel. In this case students examine Priceline.com's 2006 annual report and financial statements to make revenue-recognition recommendations for the company's name-your-own-price service and its price-disclosed offerings.
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