Barnesandnoble.Com - Went Public In 1999

WENT PUBLIC IN (1999)

In March of 1999, together with Bertelsmann, Barnes & Noble announced it would spin off barnes-andnoble.com as a public company, selling 15 to 20 percent of the company's stock to the public. In May 1999 barnesandnoble.com went public with an initial stock price of $18 per share. The IPO was popular with investors and raised $421 million, more than double what the company expected. Some 25 million shares were sold, closing at $22.94 at the end of the first day, an increase of 27 percent. Following the IPO, Barnes & Noble and Bertelsmann each owned about 41 percent of barnesandnoble.com, with the public holding the remaining 18 percent. Around this time the online bookseller also shortened its Web site address, or URL, from www.barnesandnoble.com to www.bn.com

For 1999 barnesandnoble.com 's overall revenue was $202.5 million (though later restated to $193.7 million), an increase of 211 percent over 1998. International sales doubled to more than $12 million. In 1999 book sales accounted for 93 percent of the online bookseller's revenue, compared to 98 percent in 1998. During the year the company rolled out its music store, which sold CDs and DVDs. It also formed an electronic greeting card service and launched a prints and poster gallery. In November 1999 barnesandnoble.com acquired the rights to the domain name www.books.com from Cendant Corp. It already owned the www.book.com URL and said that users going to books.com or book.com would simply be redirected to the www.bn.com site

Other marketing initiatives for 1999 included increasing the discount of New York Times bestsellers from 40 percent to 50 percent. The company also opened two new distribution centers. Pursuing a strategy to increase sales and its customer base, barnes andnoble.com reported a loss of $102.4 million in 1999 (later restated to $48.2 million), due in large part to the company's marketing expenses and costs associated with the new distribution centers.

Barnesandnoble.com also had to deal with a patent infringement suit raised by rival online bookseller Amazon.com. Amazon.com had received a patent on its technology for streamlining the purchase process, which it called 1-Click. Its suit claimed that barnes andnoble.com 's Express Checkout system violated its patent. When a federal judge issued an injunction against barnesandnoble.com to stop using the technology until the suit was settled, the company had to introduce a new online ordering technology to its Web site. While the suit had yet to be settled by mid-2001, the injunction was lifted in February 2001.