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First, Barnes & Noble sued Amazon over the Seattle start-up's use of the slogan "Earth's Biggest Bookstore." Now, the two online booksellers are at odds over the meaning of "exclusive."
Barnes & Noble on Wednesday trumpeted a "far-reaching, exclusive agreement" to be America Online's sole bookseller, paying US$40 million over four years for the privilege. But didn't its rival, Amazon, just agree to give America Online $19 million for a three-year exclusive last summer?
To further confuse things, a press release issued by Amazon.com late Wednesday night stated, "The Barnes & Noble/America Online commerce agreement has no effect on Amazon.com's existing position as an exclusive bookseller on America Online."
What's going on here? The savvy salespeople at America Online - exploiting the heated rivalry between the two booksellers - have sold two exclusives. Amazon is the sole bookseller for America Online's AOL.com Web site and NetFind Web search engine. Barnes & Noble's exclusive covers the proprietary online service only.
So when an America Online subscriber clicks through the service, they'll only be offered opportunities to buy books from Barnes & Noble. But as soon as they fire up their Web browser and land by default on the AOL.com homepage, Amazon.com will be the only bookshop on the block.
"We don't think using the word 'exclusive' was a mistake," said America Online spokeswoman Wendy Goldberg. "They're both on AOL and they both do have exclusives."
And neither bookseller, in the heat of Christmas-time competition, wants to relinquish their hold on the word.
"It's important for the consumer to know who it is that they're shopping with, and that there isn't any confusion," said Susan Boster, director of marketing for Barnes & Noble's site. "And it's important for us that we are the exclusive bookseller into the new millennium through one of the major portals of the Internet."
Amazon spokeswoman Kay Dangaard downplayed the importance of Barnes & Noble's exclusive with the online service, and instead highlighted the value of Amazon's exclusives with five of the most popular Web sites, including Yahoo and Netscape. "People lean very heavily toward the Web, and we're at a prime location with five of the six top-trafficked Web sites," Dangaard said.
Might Amazon, though, have overpaid for its three-year Web deal? While Barnes & Noble will spend $10 million a year to reach the 10 million subscribers to AOL's proprietary service, Amazon will shell out $6.3 million a year to reach far fewer users on AOL's Web properties. "Amazon's deal seems a bit rich to me," said Zona Research analyst Vernon Keenan.
While the lawsuit between the two companies was settled in October (the terms were undisclosed, though Amazon still uses the "Earth's Biggest Bookstore" tagline), the spirited elbowing seems far from over. In the company's latest press release, Amazon CEO Jeff Bezos notes that his site has an audience reach of 5.9 percent, and compares it to the 1.5 percent reach of "its nearest competitor," not even mentioning Barnes & Noble by name. Barnes & Noble counters by playing up its long-established reputation. "The consumers that are coming online now want to shop with a brand name they trust," said Boster.
"We're just warming up," said Keenan. "This is just the beginning of consumer e-commerce. The jockeying for eyeballs has only just begun."
