DJ Newswires: Barnes & Noble Uses Web To Move Beyond Books To
Information
Dow Jones Newswires -- May 27, 1998
By PHILANA PATTERSON
Dow Jones Newswires
NEW YORK -- Barnes & Noble Inc. (BKS) Vice Chairman Stephen Riggio said he believes
barnesandnoble.com will become an information marketplace.
Wednesday, the bookseller unveiled an enhanced version of its Internet site that downloads
faster, is easier to navigate and speeds up ordering. In addition, the site now has an area called
Intel's softwareforpcs.com, where Barnes & Noble sells software recommended for the Pentium
II processor by Intel Corp. (INTC), the chip's maker.
"We remain intensely focused on the book business," Riggio told Dow Jones. "We intend to
have the best bookselling site, but we believe it will become an information superstore."
Adding software to the site was a natural progression, he said. The company already sells
magazine subscriptions on-line and some software in its stores. Selling software on-line opens
opportunities to cross-merchandise by linking related books and software titles.
Barnes & Noble expects revenue from barnesandnoble.com to reach $100 million in calendar
1998. The site's ad budget for the same period is $40 million.
The company has continually made small improvements to barnesandnoble.com since its March
1997 launch, but these are the biggest changes yet, Riggio said. The ideas for many of the
changes came from on-line customer feedback, from observing how customers use the site and
from focus groups. The company has had more than 500,000 on-line customers from 158
countries.
Like other on-line retailing ventures, the site yet to make a profit. For the first fiscal quarter
ended in May, it had a loss of $8 million, or 12 cents a share. The entire company, which
typically loses money in the first quarter, narrowed that loss this year to $3.3 million, or 5 cents
a share, from $3.9 million, or 6 cents, a year earlier. Some analysts believe the overall strong
performance could help Barnes & Noble ramp up its Internet business and make it profitable
more quickly.
Although rivals such as on-line bookseller Amazon.com Inc. (AMZN) are formidable
competitors, Riggio sees room for Barnes & Noble to continue gathering market share, which is
now at 14% to 15%. And, he added, he doesn't think on-line book selling will cannibalize the
bricks-and-mortar presence.
"We think the on-line bookstore is a tremendous way to extend the franchise and expand the
market." Riggio said. "We're now reaching customers globally. We don't have stores
everywhere. This is a way to reach more people."
It may also be a way to sell more books per customer. Now customers will be notified of new
books and special promotions via e-mail.
"It makes people more frequent book buyers," Riggio said.
-Philana Patterson; 201-938-5360
Briefing Book for: AMZN | BKS
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