X-SciTech

Amazon Expands Its Borders

February 28, 2001 / 6:13 PM EST / AP

Online retailer Amazon.com will take over Borders Group Inc.'s online bookselling operations as part of a new partnership between the two companies.

A new co-branded Borders.com Web site will launch in August, the companies announced Wednesday. Terms of the agreement were not disclosed, but both said that it will not affect the earnings guidance previously issued by either company.

"This alliance allows Borders to offer our customers the convenience of an online shopping option with the added benefits that will emerge through our new association with Amazon.com," said Borders Group president and chief executive Greg Josefowicz. "While our customers' needs are met online by the people who do it better than anyone else, we will provide them with what we do best

the books, music and movies they love to explore in an engaging shopping atmosphere."

Amazon will continue to be the seller of record, providing inventory, fulfillment and content and customer service for the site. While not currently part of the deal, the companies said they may expand the agreement to allow customers to reserve titles online for later purchase and pickup at a Borders store.

Amazon.com's Web site will continue to operate independently.

According to analysts, the company has been looking to forge an alliance similar to the one it struck with Toys R Us last year. Amazon took over the toy retailer's online operations while Toys R Us continued to handle the merchandising.

The Seattle-based Amazon has reportedly been in talks with various retailers, including Best Buy Inc., the nation's largest electronics retailer, and Wal-Mart Stores.

The Ann Arbor, Mich.-based Borders, the nation's second largest bookseller, has been struggling with its e-commerce business since it was launched in 1998, three years after Amazon.com and one year after Barnes & Noble.com debuted.