cipants can be up and
running the same day.

Associates range from large and small businesses to nonprofits, authors,
publishers, personal home pages, and more. The popularity of the program is
reflected in the range of additions to the Associates Community in the past few
months: Adobe, InfoBeat, Kemper Funds, PR Newswire, Travelocity, Virtual
Vineyards, and Xoom."

The program surpassed 60,000 members in June 1998.

Barnes & Noble, the giant U.S. bookseller, is the leading operator of book
superstores in America, with 481 stores nationwide, in 48 states. It also
operates 520 B.Dalton bookstores in shopping malls. Barnes & Noble stores offer
a selection of more than 175,000 titles from more than 20,000 publishers with an
emphasis on small, independent publishers and university presses. The company
also publishes books under its own imprint for exclusive sale through its retail
stores and nationwide mail-order catalogs.

Barnes & Noble entered the world of on-line commerce in early 1997, launching
its America Online site in March 1997 - it is the exclusive bookseller to
America Online (AOL)'s more than 12 million subscribers - and launching its new
website, barnesandnoble.com, in May 1997. The site includes personalized content
recommendations from authors and editors, and more than 630,000 titles available
for immediate shipping, with deep discounts (30% off all in-stock hardcovers,
20% off all in-stock paperbacks, 40% off select titles and up to 90% off bargain
books). It has exclusive partnerships with more than 12,000 websites through its
Affiliate Network, including CNN Interactive, Lycos, and ZDNet.

On May 27, 1998, barnesandnoble.com launched a significantly enhanced version of
its e-commerce website. The new site features Express Lane one-click ordering, a
new design and navigation, improved book search capabilities and expanded
product offerings - including an on-line software superstore. In the press
release of the same day, Jeff Killeen, chief operating officer, stated:

"Through our first year in business we have listened intently to what our
customers have asked for and believe we have delivered a vastly superior product
based on those requests. [...] Innovation based on customer-focus has been the
hallmark of our success and we see our new site as proof-positive of our
commitment to be the leader in on-line bookselling and related products. We're
also extremely excited to have Intel, a leader in the te