Update: Barnes & Noble's online store becomes Yahoo's featured bookseller

Online portal Yahoo Inc. closed its chapter with Amazon.com Inc. and opened a new chapter with Barnesandnoble.com LLC.

Barnesandnoble.com and its parent company, New York-based Barnes & Noble Inc., yesterday announced an agreement that makes the online retailer the featured bookseller on Yahoo's Web sites. Santa Clara, Calif.-based Yahoo previously had a similar deal with Barnesandnoble.com rival Amazon.

The new arrangement provides for graphical links to the Barnesandnoble.com site to be included on all Yahoo search results and book category pages. The Internet-based book store also will be featured on Yahoo's online shopping portal -- a placement that's already in evidence today.

Barnesandnoble.com declined to give any details of the agreement, but spokesman Gus Carlson said the deal was "significant."

Yahoo is "the Web's biggest portal," and its audience reach will offer a greater deal of exposure for Barnesandnoble.com, said Carlson. In addition, Barnes & Noble's brick-and-mortar retail stores plan to team up with Yahoo and online advertising firm Spinway Inc. to offer free Internet access to customers who shop at the stores. The Internet service, which is set to launch next month, will take users to a Web site developed by Yahoo and Barnesandnoble.com.

Analysts said the agreement should help Barnesandnoble.com better compete against Amazon.

"Barnes & Noble hasn't had a deal of this magnitude before," said Rebecca Nidositko, an analyst at The Yankee Group in Boston. "They're finally recognizing partnerships with portals [have merit], whereas they've overlooked this channel in the past."

But Carlson said Barnesandnoble.com is involved in portal deals and affiliations with sites such as Lycos Inc. and Microsoft Corp.'s MSN. He conceded the Yahoo agreement is "a big step. It's groundbreaking for both the online and store side."

As for Amazon, its three-year agreement with Yahoo expired Tuesday night, and the company chose to stay with its other portal partner America Online Inc. Lizzie Allen, a spokeswoman for Amazon, said AOL offered a "more compelling" deal but declined to elaborate.

Barrett Ladd, an analyst at Gomez Advisors Inc. in Lincoln, Mass., said Amazon's decision to stick with AOL was a "push for profits." Amazon posted an $89 million operating loss for the second quarter, ended June 20, growing from $67 million during the same quarter last year.

"They're not focusing on adding customers, but rather on keeping the 23 million users [Amazon] has and spending money on them," Ladd said.

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