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(April 11, 2001) -- and Borders Group, owner of the Borders bookstore chain, announced today that they are forming a partnership that calls for the struggling Web site to be relaunched in August as a co-branded site using Amazon's technology.

Amazon will provide inventory, fulfillment, content and customer service to; will continue to have proprietary content, though much of it will be related to the company's physical locations, which total 335 stores in the U.S. and 14 overseas. Amazon will continue to operate its own Web site independently.

At a morning press conference in New York, Amazon CEO Jeff Bezos would only say, "There is no equity involved in either direction." Neither party would disclose the financial terms of the deal.

While this is Amazon's second partnership with a bricks-and-mortar retailer -- it operates a successful online partnership with Toys R Us -- the current deal would allow it to experiment with the potential benefits of having its brand attached to physical sites.

Although Bezos and Borders President-CEO Greg Josefowicz emphasized that Borders stores would not serve as venues for returning books that have been ordered online, the two companies are interested in exploring services such as allowing customers to reserve a book online and pick it up at a Borders store.

"We want to pilot and test some of these things," Bezos said.

Earlier this week, Amazon told analysts that it expected to be profitable -- on a pro forma operating basis -- in the fourth quarter of this year. -- Catharine P. Taylor

Copyright April 2001, Crain Communications Inc.

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