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Barnes & Noble, AOL Reach Agreement

December 17, 1997

NEW YORK (AP) _ Barnes & Noble on Tuesday said it is paying America Online $40 million to be the exclusive seller of books on the nation’s largest online service, shutting out Amazon.com and other major online book sellers.

Amazon.com, the major Internet bookseller based in Seattle, is not currently promoting its books on America Online’s proprietary service, but it is the exclusive bookseller on AOL’s Web site, which is accessible to all Internet users. Only paying AOL members can use the company’s online service.

Barnes & Noble already has a presence on AOL’s service, and the four-year deal will exand the ways in which AOL members can buy books from Barnes & Noble.

The deal is the latest this year with America Online Inc., which has staked its future profits on revenues from advertisers. In exchange for helping to promote their products, the Dulles, Va.-based company is receiving more than $225 million from companies including CUC International Inc., a buying club, and Tel-Save Holdings Inc., a seller of long-distance telephone service.

``Effectively it gives us great positioning, locks out the competition, and gives us the next four years″ of exclusive advertising, Barnes & Noble vice chairman Steve Riggio said.

Amazon.com did not immediately return a phone call seeking comment. America Online declined to comment.

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