rst launched its America OnLine (AOL) website
in March 1997 - as the exclusive bookseller for the 12 million
AOL customers -, before launching its own website,
barnesandnoble.com, in May 1997. The site was offering reviews
from authors and publishers, with a catalog of 630,000 titles
available for immediate shipping, and significant discounts:
30% off all in-stock hardcovers, 20% off all in-stock
paperbacks, 40% off select titles, and up to 90% off bargain
books. Its Affiliate Network spread quickly, with 12,000
affiliate websites in May 1998, including CNN Interactive,
Lycos and ZDNet.

In May 1998, Barnes & Noble.com launched a revamped website
with a better design, and an Express Lane one-click ordering,
improved book search capabilities, and expanded product
offerings with a new software "superstore". Jeff Killeen, chief
operating officer, stated in a press release dated May 27,
1998: "Through our first year in business we have listened
intently to what our customers have asked for and believe we
have delivered a vastly superior product based on those
requests. (...) Innovation based on customer-focus has been the
hallmark of our success and we see our new site as proof-
positive of our commitment to be the leader in online
bookselling and related products. We're also extremely excited
to have Intel, a leader in the technology products category,
open its SoftwareForPCs.com site at barnesandnoble.com."

Barnes & Noble.com began a fierce price war with Amazon.com for
the best book discounts. Amazon.com came to be known as
"Amazon.toast". Jeff Bezos, Amazon's CEO, didn't mind the
competition. In the magazine Success of July 1998, he explained
to journalist Lesley Hazleton: "The gap has increased rather
than decreased. We went from $60 million annualized sales
revenue in May to $260 million by the end of the year, and from
340,000 customers to 1.5 million, 58 percent of them repeat
customers - all that in the context of 'Amazon.toast'. We're
doing more than eight times the sales of Barnes & Noble. And
we're not a stationary target. We were blessed with a two-year
head start, and our goal is to increase that gap."

= Amazon in Europe

The European presence of Amazon began in October 1998, with the
creation of two subsidiaries in Germany and in United Kingdom.

In August 2000, Amazon had 1.8 million customers in U.K., 1.2
million customers in Germany, and less than 1 million customers
in France. Amazon opened