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Amazon.com, B&N settle
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October 21, 1997: 3:59 p.m. ET
Both will continue to bill themselves as "world's largest" bookstore
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NEW YORK (CNNfn) - Amazon.com Inc. said Tuesday it agreed with competing book retailer, Barnes & Noble Inc., to settle their outstanding litigation related to the claims "Earth's largest" or "World's largest" bookstore.
The lawsuit -- filed just prior to Amazon.com's public offering in May --alleged the Seattle-based online book retailer falsely billed itself as "World's largest" because it doesn't have any books in stock. Amazon.com subsequently filed a countersuit alleging unfair competition.
As part of the settlement, neither party admitted any liability nor paid any monetary damages. Meanwhile, both companies continue to bill themselves as the largest book retailer on Earth.
"The parties simply decided that they would rather compete in the marketplace than in the courtroom," Amazon.com said in a statement.
Amazon.com's stock (AMZN) climbed 5-7/16 to 51-5/16 on word of the settlement. Barnes & Noble shares (BKS) were up 3/4 to 27-13/16.
In retrospect, the lawsuit accomplished little for Barnes & Noble, which began to focus on the Internet marketplace at least two years after its smaller rival.
"The suit that Barnes & Noble filed was extremely poorly timed," said Melissa Bane, analyst at Yankee Group in Boston.
"In terms of public relations, it was a major snafu. I think it got a lot of negative reception in the market. Barnes & Noble look like someone who came to the party late and then started throwing their drinks at people," Bane said.
Indeed, Amazon.com chief executive, Jeffrey Bezos, never denied that Barnes & Noble was a larger company.
"I certainly think it's true that Barnes & Noble is a much, much larger company. I mean, they're a company with almost $3 billion in sales. They have 28,000 employees. Amazon.com has 500 employees," Bezos told CNNfn during an interview in August.
-- Robert Liu
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