There's always been a little mystery to the "Name Your Own Price" model at (NASDAQ:PCLN). Now you'll also find a little mystery in the company's own quarterly report.

Last night's first-quarter report can't be taken at face value, since the posted results are misleading. The company reported a loss of $0.44 per share, but it's not that bad. The company reported a 25% surge in revenues to $301.4 million, but it's not that good.

See, the loss was weighed down by a class action lawsuit settlement. On a pro forma basis, Priceline actually generated a profit of $0.43 a share. As for the top line, $15.9 million of that gain is due to an approved refund request with the IRS for excise taxes that were paid on merchant airline tickets. Without that refund, revenue actually rose just 18% to $285.5 million.

Every detail begs for a little more color at Priceline these days. Even something as simple as eyeing the impressive 34% surge in gross travel bookings is an incomplete metric. It's great to see Priceline move $998 million in bookings for the period, but there's a sharp contrast between the 91% surge in European bookings and the 1% gain domestically.

The revenue mix is also a case of passing ships. Airline ticket sales continue to fall, as consumers turn to booking flights directly, while hotel and car rental bookings are growing nicely.

The problem with portals
Running a travel portal isn't easy. Whether you're Priceline or Expedia (NASDAQ:EXPE) domestically -- or (NASDAQ:CTRP) or eLong (NASDAQ:LONG) in China -- savvy travelers aren't stopping at the first portal they see.

Sites like Travelaxe, Sidestep, and make it too easy to compare prices from several different providers. Weekly emails like Travelzoo's (NASDAQ:TZOO) Top 20 provide bargains that are sometimes too good to pass up.

Then you have the airlines, hotels, and car rental agencies that are waking up to cyberspace, making sure that consumers get great pricing by cutting out the commissioned middleman.

It's getting way too habitual to lean on portals for research, only to run off and book directly with the actual provider. We're not at the point where the portals need to embrace an ad-driven model, though it may have to come to that in a few years.

The Priceline promise
This should be a great time for Higher gas prices and an unsure economy find potential summer travelers tightening their vacation budgets. This is the kind of scenario that would send many in the travel industry curling up in fetal positions and crying in the corners. That's a feast for Priceline, with consumers willing to take a chance on its "Name Your Own Price" option to save as much as 40% on airfare and lodging and 30% on auto rentals.

It's a theme you see repeated elsewhere. Six Flags (NYSE:SIX) relies on local traffic to drive turnstile clicks, a lot of those coming from folks who decide to call off more elaborate road trips. Great Wolf Resorts (NASDAQ:WOLF) markets itself as a self-enclosed destination. The overnight rates aren't cheap, but it's able to save vacationers from having to drive elsewhere thanks to its massive indoor waterparks, busy activity calendar, and wide assortment of food options.

Priceline sees it that way, too. It expects to earn between $2.90 a share and $3.10 a share for all of 2007 on a pro forma basis. Charges, stock-based compensation, and several other factors will knock reported earnings per share down to between $1.25 and $1.45. Analysts prefer to project Priceline's bottom line potential on a pro forma basis, and the company's guidance is better than the $2.85 per share Wall Street estimates.

This finds Priceline doing just fine, for now. The company has beaten analyst profit targets for four consecutive quarters now. It should be a beneficiary of a problematic summer elsewhere. I'm still concerned about the long-term role of travel portals, but Priceline is unique enough to stand out today, and smart enough to think ahead before tomorrow.

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Longtime Fool contributor Rick Munarriz still relies on the portals to get basic travel information, but then he runs off to see if better deals can be had directly with the provider. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.