Barnes & Noble, Inc. ("Barnes & Noble" or the "Company") is the #1 bookseller in the US, where it accounts for one of every eight books sold. The company operates more than 1,000 stores, including more than 500 superstores (Barnes & Noble, Bookstop, and Bookstar) and about 480 mall stores (B. Dalton, Doubleday, and Scribner's), and is still growing rapidly. In addition, Barnes & Noble runs a leading direct-mail bookselling business and a book publishing business. It has boosted its online sales operations in an attempt to take market share from Internet rival Amazon.com, and it is buying the #1 US book wholesaler, Ingram Book. Chairman and CEO Leonard Riggio owns about 25% of Barnes & Noble. The Company is the only book retailer operating through all four channels of distribution: retail stores, the Internet, 1-800-THE BOOK and mail order.

"The Company believes that [a website] brings significant competitive advantages to the online bookselling market, including its distribution expertise, proprietary title database, large customer base and established brand recognition."

During March of 1997, the Company, through its BarnesandNoble.com Inc., became the exclusive bookseller in America Online's marketplace (keyword: BarnesandNoble), linking the world's largest bookseller with the world's most popular Internet online service. While the two companies had a four-year agreement, in May of 1997, BarnesandNoble.com launched its own website.

PRICING

Barnes & Noble stores employ a nationwide discount pricing strategy. The New York Times hardcover bestsellers are discounted 30% off the publishers' suggested retail price, with a 10% discount on most other hardcover books. The pricing strategies the Company has helps them to be highly competitive. BarnesandNoble.com has a discounted pricing strategy of 30% to 40% off publishers' suggested retail prices for hardcover and 20% off publishers' suggested retail prices for paperback.

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MANAGEMENT TEAM

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