The Newsstand Wars

In a move that helps in part to counter a recent magazine deal by rival
Borders.com, Barnes & Noble.com and Barnes &
Noble Inc. increased their investment in Internet magazine
retailer enews.com to a majority stake.

In addition to selling directly through its own Web site, enews.com has powered the Barnes & Noble.com
magazine store on an exclusive basis since March 1998.

Now, Barnes & Noble will incorporate magazine subscriptions into the
bookseller’s 569 real-world superstores, each of which has an extensive
newsstand area.

Financial terms of the deal with enews were not disclosed. Last week, Ann
Arbor, Mich.-based Internet bookstore Borders.com did a
partner deal
with MegaMags Inc. and launched an online magazine newsstand
offering 21,000 titles.

Barnes & Noble also said it plans to launch a pilot program with enews.com to
offer subscriptions to the college student marketplace through Barnes &
Noble’s more than 400 college bookstores, and is exploring a number of other
online and off-line initiatives.

“Our majority interest in enews provides Barnes & Noble with a powerful
marketing and e-commerce platform,” said Steve Riggio, vice chairman of
Barnes & Noble.com. “We intend to create a variety of exciting new marketing
opportunities for magazine publishers. Additionally, the enews commerce
platform positions us well in the emerging market for broadband wireless
devices, as we will be able to deliver magazine content digitally.”

Barnes & Noble.com has held a stake in enews since December 1999. A number of
the original investors in enews will retain a minimal stake in the company.
enews will retain its strategic relationships with major magazine publishers,
marketing partners and its network of more than 85,000 affiliates, and the
enews Web site will
continue to serve customers.

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