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Amazon.com Introduces Worldwide Digital Group; Names General Manager of Worldwide Digital, Celebrates AtRandom.com Launch with Random House and Microsoft

SEATTLE--March 8, 2001--Leading online retailer Amazon.com (Nasdaq:AMZN) (www.amazon.com) today announced it has named Jeff Blackburn general manager of worldwide digital.

As such, Blackburn will lead the Amazon Worldwide Digital Group in the continued development and deployment of the company's global digital distribution platform.

Additionally, Blackburn will be joining executives from Microsoft (Nasdaq:MSFT) and Random House, Inc., this evening at an event celebrating the launch of AtRandom.com Books, a new imprint devoted to publishing original electronic books. This collection of titles is currently available, in Microsoft Reader format, in Amazon.com's e-Books store (www.amazon.com/e-books).

Amazon.com's Worldwide Digital Group was created to centralize its digital platform and aggressively scale it across product lines and geographies. Blackburn was instrumental in building the team and defining its industry-wide mission to help content owners maximize sales of their digital products online. The group is working closely and building long-term alliances with book publishers, record labels, film studios and game and software publishers to cultivate this valuable new distribution channel.

The Worldwide Digital Group is also working to ensure that Amazon.com customers enjoy a best-of-breed digital download experience across categories. This includes leveraging its leading technology platform and expertise to offer a broad selection of titles, authors and artists -- with a suite of exclusive titles and content -- to its more than 30 million media-buying customers. In addition, Amazon.com will continue to offer the most simple and easiest-to-use digital technology and payment systems available online.

"We've always planned to develop an aggressive digital offering when the experience was truly valuable for customers," said Blackburn. "Even though this channel is still in its very early stages, major publishers and record labels have the right teams and plans in place to drive rapid progress. We know tens of millions of customers want access to digital content online, and we intend to work with our content partners to quickly improve the digital download buying experience and available selection. We expect tremendous upside for all stakeholders as the format matures."

Amazon.com has been a leader in the digital revolution since its inception. It has been actively experimenting with digital content since April 1999, and has helped create many of the current models for using digital content to simultaneously promote physical book and CD sales.

Pioneering Music Downloads

Amazon.com was the first Internet retailer to offer free digital downloads to promote an upcoming release by a major recording artist. In March 1999, the company worked with Newark/Arista Records and Liquid Audio on a multifaceted promotion featuring free downloads of two recordings from Sarah McLachlan's then-upcoming album, Mirrorball.

Amazon.com has since worked with nearly every major record label to promote artists and introduce new releases by maximizing the promotional power of digital downloads. Last week Amazon.com launched a new Free Music Downloads Community (www.amazon.com/music-downloads), designed to help fans discover the music of major-label and independent artists through thousands of free MP3 and Liquid Audio downloads, artist uploads and a unique, virtual tip jar for voluntary artist payments.

Expansion into e-Books

The company first tested e-books in March 2000 when it worked with Simon & Schuster to offer customers free downloads of Stephen King's Riding the Bullet. The promotion was so successful that Amazon.com joined King for a second download in July 2000. In an ambitious publishing experiment, monthly installments of The Plant were made available for download at www.stephenking.com. King asked his readers to pay $1 for each installment on the honor system and selected Amazon.com to provide a secure, easy-to-use online payment method. More than 100,000 readers paid more than $700,000 to Mr. King via the Amazon Honor System. In June 2000, Amazon.com and Audible, Inc., (Nasdaq:ADBL) partnered, allowing customers to purchase and download from Amazon.com more than 22,000 hours of digital audio content, including audiobooks, entertainment and comedy, audio newspapers, magazines, business information, speeches, lectures and public radio programs.

The company applied what it learned from these initiatives to launch a dedicated e-Books store in November 2000. The site features content never before available in print, along with exclusive electronic book titles in Microsoft Reader format and downloadable digital audio titles from Audible.

The store brings together the best of Amazon.com -- great search capabilities, unique personalization features, insightful customer reviews and vast selection -- and the strengths of the Microsoft Reader eBook platform to bring customers the ultimate destination for digital content.

"Microsoft and Amazon.com share a vision of a future in which consumers have easy and instant access to a great selection of eBooks and other digital content, and this announcement represents an important milestone," said Steve Stone, general manager of Microsoft's eBooks group. "We're proud to be working with Amazon.com to bring this common vision to reality."

Customers can browse and download thousands of titles, including the new collection of downloadable e-books from AtRandom.com Books, available now at Amazon.com. The initiative marks one of the first extended entries into the creation of original content for digital platforms by any of the publishing divisions of Random House, Inc., the world's largest English-language trade publisher.

"The success of e-books depends upon partnerships with other industry leaders. We are proud to be working with Amazon.com and Microsoft to offer readers a varied, compelling and highly readable array of original e-books," said Mary Bahr, editorial director of AtRandom.com Books.

Beyond Books and Music

Amazon.com is also rolling out digital content in other categories. In October 2000 it partnered with Ofoto, Inc., a premier online photography service, to offer customers digital photography through its new Camera & Photo store (www.amazon.com/photo). In February it introduced a dedicated Software Downloads store, making it more convenient for customers to purchase popular software programs -- like TurboTax from Intuit (Nasdaq:INTU) -- and download them directly to their computers from Amazon.com.

About Amazon.com, Inc.

Amazon.com (Amazon.com, Inc., and its subsidiaries) is the Internet's No. 1 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 seeks to be the world's most customer-centric company, where customers can find and discover anything they might want to buy online. Amazon.com lists more than 28 million unique items in categories such as electronics, kitchen products, books, music, DVDs, videos, camera and photo items, toys, software, computer and video games, tools and hardware, lawn and patio items, and wireless products. Through Amazon.com zShops, any business or individual can sell virtually anything to Amazon.com's more than 30 million cumulative customers, and with Amazon.com Payments, sellers can accept credit card transactions, avoiding the hassles of offline payments.

Amazon.com operates four international Web sites: www.amazon.fr, www.amazon.co.uk, www.amazon.de and www.amazon.co.jp. It also operates the Internet Movie Database (www.imdb.com), the Web's comprehensive and authoritative source of information on more than 250,000 movies and entertainment titles and 1 million cast and crew members dating from the birth of film in 1891 to 2003.

Amazon Anywhere is the leader in mobile e-commerce, providing access from anywhere in the world to Amazon.com, Amazon.co.uk and Amazon.de on personal digital assistants (PDAs) and through handheld wireless Internet devices that use HDML or the Wireless Application Protocol.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties that include, among others, Amazon.com's limited operating history, anticipated losses, significant amount of indebtedness, 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, inventory risks, 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, strategic alliances and the Amazon Commerce Network. 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 and 10-K/A for the year ended December 31, 1999, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June 30, 2000, and September 30, 2000.


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