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Amazon.com Expands Its Borders

Borders Group Inc., which signed an online alliance with e-tail giant Amazon.com a year ago, now will provide Amazon users with the option of picking up books, music CDs and DVDs at Borders' bricks- and-mortar stores nationwide

The deal puts another arrow in Amazon's quiver, and the timing was certainly nice, coming just hours before Amazon was to report its first quarter earnings.

This second agreement between the companies also will allow for the creation of a new co-branded Web site, Waldenbooks-teamed-with-Amazon.com, which follows the successful Borders-teamed-with-Amazon.com site that has been up for nine months.

The multi-year agreement has terms similar to the Borders-teamed-with Amazon.com alliance, with all sales originating through the new Waldenbooks-Amazon site recorded by Amazon.com with an unspecified percentage of sales going to the Ann Arbor, Mich.-based Borders Group. Inventory, fulfillment and customer service will be provided by Amazon.com.

The original deal came at a time when Borders.com was faltering in its efforts to sell books online.

Borders and Seattle-based Amazon said that for this year's holiday season customers would be able to order online and pick up their purchases at one of more than 365 Borders stores throughout the United States.

The companies said that when customers view a product description page, they will have the option to complete their order online with delivery from Amazon.com or to see if the item is in-stock at their local Borders stores, based on the customer's zip code and product availability.

The new Waldenbooks.com at Amazon will be designed to appeal to the more than three million members of Waldenbooks' Preferred Reader loyalty program who will be able to earn points with every purchase made through the co-branded site, Borders said.

Meanwhile, a day before the earnings release, Deutsche Bank Securities, which has a BUY rating on Amazon, said it expects the company to post first quarter results in line to slightly ahead of its revenue forecast of $820 million (up 17 percent year-over-year), while the earnings per share loss should be at least several pennies ahead of its earlier estimate of a loss 9 cents.