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No. 1 Online Music Retailer Amazon.com Announces Fourth Quarter 1999 Music Store Results

No. 1 Online Music Retailer Amazon.com Announces Fourth Quarter 1999 Music Store Results

SEATTLE--Feb. 2, 2000--Leading online retailer Amazon.com (www.amazon.com) (Nasdaq:AMZN) today announced that sales from its U.S. Music Store in the fourth quarter of 1999 reached $78 million, up more than 136 percent from the fourth quarter of 1998. Sales for fiscal year 1999 were $195 million, and the store ended the year with an annualized run rate solidly over $300 million. With these results, Amazon.com continues to set the pace for online music sales.

Amazon.com's continual focus on providing the best music shopping experience helped the retailer dominate 1999 industry polls, earning the following honors:

  • No. 1 overall Internet music store in Gomez Advisors' two most recent scorecards.
  • No. 1 ranking in the first Forrester PowerRankings for online books, music, and video retailers.
  • The Harris Interactive ecommercePulse Excellence Award for the highest overall satisfaction rating among online music and video retailers.
  • The Midemnet Award 2000 for the best music shopping/digital distribution Web site.

"Amazon.com's music team is a group of music experts and music lovers devoted to helping our customers find music titles and music-related items they'll love," said Jennifer Cast, Amazon.com Music Store general manager. "We're extremely grateful to our customers, who shared suggestions and criticisms that resulted in making Amazon.com not only the No. 1 online music shopping destination but also the easiest-to-use, most comprehensive music store on or off the Internet. We look forward to working with our customers to develop many more additions and improvements to our store in 2000."

During 1999, Amazon.com launched a steady stream of new features to serve its music customers better. Enhancements to Amazon.com's Music Store last year include:

  • Free Digital Downloads that enable customers to try before they buy: During 1999, Amazon.com's Music Store led the way in the exciting arena of digital downloads, becoming the first major online retailer to dedicate an area of its store to free, full-length song downloads from established artists, major-label performers, and independent artists. Innovative and successful download offerings helped spark several albums to No. 1 on the Amazon.com music charts, including Santana's Supernatural, Sarah McLachlan's Mirrorball, and Buena Vista Social Club. In November, Amazon.com teamed with the artist Moby and The Late Show with David Letterman to offer a download immediately following a performance on the show. Amazon.com continues to offer the largest selection of free promotional song downloads from major label artists of any major online music retailer, in addition to a large collection of downloads from independent artists in the Amazon.com Advantage program.
  • Expanded selection of music from independent artists unavailable in most stores: Customers can find thousands of noteworthy CDs by independent artists and labels enrolled in Amazon.com's Advantage program. New features to expose and promote the music of these artists include the Emerging Artists area, which offers bestseller lists in 18 genres and features new and notable CDs. The New Music Spotlight, also a new addition, features free downloads from many of these artists, introducing customers to a selection of handpicked songs they may have never heard before. With these features, customers can now easily explore and discover great new music from independent artists in any genre.
  • Increased selection of music-related items: The addition of tapes and vinyl in the Music Store, the expansion of the Amazon.com Advantage program, and the launches of Electronics, Toys, Auctions, and zShops make Amazon.com the ultimate one-stop shopping destination for all things music. Amazon.com now offers the largest selection of music-related items, including U.S. CDs from major-label and independent artists, import CDs, cassette tapes, vinyl, music-related books, music videos, home audio electronics, portable CD and MP3 players, music memorabilia, both children's and adults' musical instruments, and used and rare music titles.
  • Classical Music Center: No other music store--physical or online -- offers classical music experts and novices a greater selection of classical music or more ways to discover excellent classical recordings. The new Classical Music Center combines new features such as Orchestra Schedules with Amazon.com editors' selections for the Essential CDs by classical composers and artists, plus enhanced areas including Classical and Opera stores, Classical and Opera Top Sellers, and the powerful Classical Search Engine.
  • Guides to the best music for every taste: The enhanced Recommendation Center helps customers find CDs they'll love via Amazon.com's editors' selections for the Essential CDs by Style, Artist, Composer, and Year, plus informative introductions to Classical, Jazz, and International music that help new listeners become familiar with genres that can sometimes be perceived as intimidating.
  • Information on new titles -- before they are released: Highlighting noteworthy new and upcoming releases from major label and independent artists, the New & Future Releases area gives customers an easy and reliable way to stay on top of the newest releases. At Amazon.com, customers can order CDs before they are released and receive them on the day of release. "Amazon.com's music team looks forward to continuing to provide our customers with the No. 1 online music shopping experience in 2000," said Cast. "We're excited about the possibilities that digital downloading and other new technologies offer music fans. We believe customers will have more access to more music, more quickly than ever before, and we intend to set the pace by making our customers' experience better than ever before."

About Amazon.com's Music Store

Amazon.com's Music Store, which opened in June 1998, is the No. 1 online music store and offers shoppers more than 25 times the CD selection of the typical music store at everyday savings of up to 30 percent. Customers can find everything from the latest releases to hard-to-find gems in any music genre. Amazon.com's Music Store features: the largest staff of music editors on the Web; thousands of reviews by expert staff editors and nationally known critics; song samples; free, full-length song downloads from established and independent artists; artist interviews; lists of essential albums by style, artist, composer, and year; helpful introductions to classical, jazz, and international music; thousands of bestseller lists; and personalized music recommendations.

About Amazon.com, Inc.

Amazon.com (Amazon.com, Inc., and its subsidiaries) is the Internet's No. 1 music, No. 1 DVD and video, and No. 1 book retailer. Amazon.com (Nasdaq:AMZN) opened its virtual doors on the World Wide Web in July 1995 and today offers Earth's Biggest Selection, along with online auctions and free electronic greeting cards. Amazon.com lists more than 18 million unique items in categories including books, CDs, toys, electronics, videos, DVDs, home improvement products, software, and video games. Through Amazon.com zShops, any business or individual can sell virtually anything to Amazon.com's more than 13 million customers, and with Amazon.com Payments, any seller can accept credit card transactions, avoiding the hassles of offline payments. The company also participates in sothebys.amazon.com, the leading auction site for guaranteed art, jewelry, and collectibles, at www.sothebys.amazon.com.

Amazon.com seeks to be the world's most customer-centric company, where customers can find and discover anything they may want to buy online. Amazon.com's All Product Search scours the Web to help customers find merchandise that is not available at Amazon.com, Amazon.com Auctions, or Amazon.com zShops, making Amazon.com the shopping destination to find anything.

Amazon.com operates two international Web sites: www.amazon.co.uk in the United Kingdom and www.amazon.de in Germany. It also operates the Internet Movie Database (www.imdb.com), the Web's comprehensive and authoritative source of information on more than 150,000 movies and entertainment programs and 500,000 cast and crew members dating from the birth of film in 1892 to the present.

Amazon.com has invested in leading Internet retailers that are improving the lives of customers by making shopping easier and more convenient: Greenlight.com, the only company that offers car buyers the control of auto purchasing online with ongoing service and support from local dealerships, at www.greenlight.com; drugstore.com, an online retail and information source for health, beauty, wellness, personal care and pharmacy, at www.drugstore.com; Pets.com, the online leader for pet products, expert information, and services, at www.pets.com; HomeGrocer.com, the first fully integrated Internet grocery-shopping and home-delivery service -- with operations in Seattle; Portland, Oregon; and Southern California -- at www.homegrocer.com; Gear.com, which offers brand-name sporting goods at prices from 20 to 90 percent off retail, at www.gear.com; and Ashford.com (Nasdaq:ASFD), the leading Internet retailer of luxury and premium products and the Web's No. 1 retailer of watches and jewelry, at www.ashford.com. Amazon.com also has a minority interest in Della.com, which brings together leading retailers with gift registry, expert advice, and personalized gift suggestions to help everyone give better gifts, at www.della.com; and NextCard, Inc., considered the industry's leading issuer of consumer credit on the Internet, at www.nextcard.com.

This announcement contains forward-looking statements that involve risks and uncertainties that include, among others, Amazon.com's limited operating history, anticipated losses, unpredictability of future revenues, potential fluctuations in quarterly operating results, seasonality, consumer trends, competition, risk of distribution center expansion, risks related to fourth quarter performance, risks of system interruption, management of potential growth, risks related to auction and zShops services, risks related to fraud and Amazon.com Payments, and risks of new business areas, international expansion, business combinations, and strategic alliances. More information about factors that potentially could affect Amazon.com's financial results is included in Amazon.com's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1998 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999, and September 30, 1999.


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