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To: QuietWon who wrote (61688)	3/15/1999 12:55:00 PM
From: Michaelste	Read Replies (1) \| Respond to of 119973

CDNW NEWS CDnow Fincl Chief Expects '99 Revenue Of $200M NEW YORK (Dow Jones)--Driven by repeat sales to existing customers, CDnow Inc. (CDNW) and N2K Inc. (NTKI) expect 1999 revenue to reach $200 million, up from $98.5 million last year, according to CDnow Chief Financial Officer Joel Sussman. The two online music retailers, which are scheduled to close their merger Wednesday, derived 53% of combined 1998 revenue from repeat sales to existing customers, Sussman said Monday during a presentation at the PaineWebber Internet conference here. That percentage should reach the 60% range this year and hit 70% in 2000, he said. The merged company will reduce expenses by $20 million to $25 million this year, Sussman said. Cutting its 450-member work force by 20% and marketing savings are among the ways the company will trim expenses. CDnow Chief Executive Jason Olim, speaking during the same presentation, said the merger would also help reduce the cost of new-customer acquisition. During 1998, CDnow and N2K spent about $50 per new customer. With about 1.7 million unique customers as of December 1998, the combined company plans to use its customer base to build its digital distribution business, Olim said. This summer, customers will be able to use MP3 or another digital technology to download music from the Web site. Olim said CDnow and N2K have already started to license music from independent record labels for that purpose. It is unclear whether major record labels will participate in the initiative, he said. While Olim offered no predictions of how much revenue digital distribution will produce, he said he expects the company to be the leading player in that area. -Nancy Beiles; 201-938-5267 (END) DOW JONES NEWS 03-15-99 12:48 PM