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AMAZON REDEFINES BORDERS

E-Tailer To Ally With Borders, Take Over Company’s Online Needs And Cuddle When Necessary
Amazon and Borders reached an agreement today to sell books, music and movies over the Internet—what a novel idea.

Under its agreement with Borders, Amazon will relaunch Borders.com as a co-branded website—possibly in August—with Amazon handling customer service, fulfillment (spiritual and otherwise) and inventory. Last year, Amazon reached a similar deal with Toys ‘R' Us.

"The goal here is to provide an even better customer experience," said Amazon CEO Jeff Bezos, in a conference call. "And what could be a better experience than buying stuff from my company?"

Borders had always operated in the shadow of online competitors Amazon and Barnes & Noble. In fact, the company didn't debut its online presence until May 1998, three years after the launch of Amazon and one after Barnes & Noble. Barnes & Noble is 40%-owned by Bertelsmann AG.

According to CNET, the existing Borders website will continue to operate until the launch of the co-branded site. The 70 employees currently working at Borders.com will eventually be let go, Borders CEO Greg Josefowicz confirmed during the call. However, he said the company will work with them to find alternative positions or will offer severance packages.

Although the companies said they didn't expect the agreement to have an impact on earnings, in early trading on Wednesday, Amazon's shares rose 94 cents (or 8%) to $12.95 and Borders' rose 27 cents to $17.25.

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