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Tuesday, May 13, 1997 - Page updated at 12:00 AM

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Amazon.Com Sued For `Earth's Biggest' Claim

Bloomberg News

NEW YORK - Barnes & Noble bookstore chain is suing to block Amazon.com from advertising that it's "Earth's biggest bookstore."

Seattle-based Amazon.com is a "book broker" and not a "bookstore" because it sells books over the Internet, the lawsuit said.

Barnes & Noble said it's been the world's biggest bookstore since 1992, with more than 1,000 outlets.

The lawsuit filed in New York federal court comes as Barnes & Noble starts its own Internet site called BarnesandNoble.com.

In addition, Amazon.com is planning to sell stock to the public this week to raise about $29.4 million after expenses.

"I don't think it's coincidence that they waited until this week to file the lawsuit," said Ryan Jacob, director of research for IPO Value Monitor in New York.

Still, Amazon.com's stock offering "will be a very hot deal," Jacob said.

New York-based Barnes & Noble and Amazon.com declined to comment on the lawsuit.

Barnes & Noble is asking a federal judge in New York to block Amazon.com from running such ads, which have appeared on Amazon.com's Web site and in the New York Times Book Review. It also is seeking unspecified damages for any sales losses it may have suffered because of the ad.

Barnes & Noble said Amazon.com refused its demand on Jan. 28 that it cease the ad.

Barnes & Noble said Amazon.com's warehouse in Seattle stocks only a few hundred book titles, while Barnes & Noble stores stock more than 170,000 titles. It said both companies must order out-of-stock books from wholesalers or publishers, refuting Amazon.com's claim that it has access to books Barnes & Noble can't get.

The Web sites of the companies will offer 1.5 million book titles in print and 1 million titles that are out of print, the companies said.

The lawsuit comes as Amazon.com, which has been selling books since July 1995, prepares to sell 2.5 million shares at $12 to $14 each. The stock is expected to being trading this week under the ticker AMZN.

The company has been operating at a loss, but investors often will put money into a new offering in expectation of strong profits. Papers filed with the Securities and Exchange Commission show that from July 5, 1994, when it was founded, to the end of 1994, Amazon.com lost $52,000. For 1995, the loss was $303,000; for 1996 it was $5.7 million. For the first three months of this year the company lost $2.97 million. Sales for the first three months of 1997, however, jumped to $16 million from $875,000 a year earlier.

Information from Associated Press is included in this report.

Copyright (c) 1997 Seattle Times Company, All Rights Reserved.

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