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.