Barnes & Noble.com William Lynch President Barnes & Noble.com BARNES NOBLEBarnes & Noble.com Scalable business with lots of room to grow > New management on board, significant upgrade in tech talent > Infrastructure investments behind us > We deliver large selection and fast shipping > Our marketplace sales are growing > Consistently high customer service rankings > Faster innovation in search, personalization & easy ordering > Testing new product categories BARNES NOBLE 30 SOSKSRLL ERDKey Trends on the Business are Positive sunescale > Double digit traffic growth >» Accelerating top-line growth » Accelerating growth in customer fileBARNES <-NOBLEDigital Strategy a Every device strategy: PC’s, Macs, SmartPhones, dedicated eReaders Establish “white label” deals with leading hardware/telcos Price competitive: bestsellers & new releases $9.99 DRM technology enables ala carte, subscription, book + digital upgrade Tens of millions of sku’s: books, textbooks, magazines, newspapers, blogs Aligned with leading tech partners: Adobe, Plastic Logic, IREX Proprietary device: nook Leverage online/in-store synergy BARNES NOBLEnook: Loads of Innovation >» 3G wireless access > Color touch screen navigation > elnk™ display for reading >» Android™ >» Superior PDF capability >» Wi-fi enables FREE browsing in any B&N store > Digital lending technology BARNES, NOBLEnook: Early Reviews We call it the world's most advanced eBook Reader. Critics agree. tes anyone et aterg at ty eceader Fa Compo, you joer 2K. Joure ors BARNES NOBLEnook: Building an Eco-System » Accessories > Warranties » Additional Contentnook: Marketing 7 2 Barnes & Noble Bookstores 6 24 Barnes & Noble College Stores 40,000 Booksellers Barnes & Noble.com BARNES NOBLEQUE™ proReader by Plastic Logic > Que™ to be sold by Barnes & Noble in bookstores and online > Featured near the nook in bookstores > Provides access to the Barnes & Noble eBookstore BARNES <:NOBLEeBook Devices — Latest Forecast > Raised 2009 eBook device sales forecasts to 3 million units (from 2 million previously) > 2010 sales are expected to double >» Predicts 900,000 units will sell during holidays > Cumulative eReader sales of 10 million units by the end of 2010 ‘Source: Forrester Research, 10/06/09 BARNES <:NOBLEDigital Content: A Multi-Billion Dollar Market v Enhanced eBooks v Supplementary content post- publication New forms of content (serial novels, alternate endings, collaborative writing...) v eBook + "p" book combos Subscriptions: newspapers, magazines, blogs v “Ala cart" purchasing of archived and historic newspaper and magazine content Professional, technical & academic journals BARNES NOBLE