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EXHIBIT 99.1
FATBRAIN.COM CLOSES $36 MILLION INVESTMENT IN MIGHTYWORDS SUBSIDIARY; SUBSIDIARY
BECOMES INDEPENDENT ENTITY
INVESTORS INCLUDE BARNES & NOBLE.COM AND VULCAN VENTURES INC.
SANTA CLARA, CALIF., JUNE 6, 2000 - Fatbrain.com(TM) (Nasdaq: FATB), a leader in
Web-based information management for businesses, today announced it has closed
$36 million in venture capital investments in its MightyWords(TM) subsidiary and
is separating the subsidiary to operate as an independent, privately-held
company. The investments include $20 million from Barnes & Noble.com (Nasdaq:
BNBN), $10 million from Vulcan Ventures Inc. and an additional $6 million from
other investors, including Millennium Technology Ventures, Highland Capital
Partners and APV Technology Partners.
As part of the arrangement, Fatbrain.com will receive approximately $8.5 million
from MightyWords as reimbursement for expenses incurred on behalf of the
subsidiary over the past five months. Fatbrain.com will use the reimbursement as
operating capital. Fatbrain.com will retain an approximately 23 percent
ownership in MightyWords, while Barnes & Noble.com will own an approximately 30
percent of the company.
In addition, Fatbrain.com today announced the appointment of Dennis Capovilla,
40, to chief executive officer. Capovilla succeeds founder Chris MacAskill, who
will remain chairman of the board for Fatbrain.com and serve as CEO for the
newly-independent MightyWords. Capovilla also has been nominated to
Fatbrain.com's board of directors.
"With the clarity the MightyWords separation brings, we are able to focus all
our resources, including the additional working capital, on growing our core
business," Capovilla said. "Without the expenses associated with pursuing a
start-up mass marketing opportunity, we'll be able to shorten our path to
profitability. Our core business is about aggressively leveraging our experience
as the Internet's most comprehensive professional bookstore to provide
co-branded 'information stores' for companies that want an end-to-end solution
to aggregate, catalog and merchandise information for their internal and
external constituents."
Capovilla said large organizations are finding an online bookstore-like method
of getting all types of information - from product documentation, sales
collateral and training materials to third-party content of every variety and
form - to employees, customers, partners and vendors to be much easier and more
cost-effective and efficient than traditional methods.
"It's an extremely compelling proposition for corporations," Capovilla said,
"especially because recipients of their materials are increasingly opting for
receiving it in digital rather than hard-copy form. Although we have
print-on-demand capabilities, we are not printers. We specialize in getting
whatever a person wants, in whatever form they want it, to them as quickly as
possible."
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In April, Fatbrain.com announced a partnership with IKON Office Solutions (NYSE:
IKN), a world leader in print outsourcing, to develop and co-market a product
that will allow their respective corporate customers to more easily and
efficiently move to Web-based publishing, ordering, distribution and fulfillment
of business publications. A key goal is to offer a migration path to secure
digital delivery of information.
Capovilla, who joined Fatbrain.com in 1997 as vice president of sales and
business development, has served as president and chief operating officer since
December 1999. He is responsible for the company's transformation to an
information infrastructure partner to larger companies who are looking to
utilize the Web to streamline the management and distribution of documents and
other business materials. Fatbrain.com's customers include 350 of the Fortune
1000 companies, including such industry leaders as Cisco Systems, Oracle
Corporation, Sun Microsystems, Microsoft, Hewlett-Packard Company, Lucent
Technologies, GTE, Bank of America and Ford Motor Company.
ABOUT MIGHTYWORDS
MightyWords has created a new digital marketplace for the written word. Through
key partnerships with leading Internet sites including Barnes & Noble.com,
MightyWords enables the mass distribution of compelling content from top
publishers, branded content providers, professionals and best-selling authors.
MightyWords uses a secure digital rights technology to instantly publish,
distribute and sell unique and interesting written works to the world. Readers
download the works directly to their PCs where they may be read on screen or
printed out. Visit MightyWords at http://www.mightywords.com.
ABOUT FATBRAIN.COM
Fatbrain.com (Nasdaq: FATB) is the leader in managing, marketing and
distributing information for businesses. Today, the company's Web-based services
reach more than 2.25 million employee desktops at more than 350 of the Fortune
1000 corporations worldwide. Fatbrain.com's easy-to-use, comprehensive solutions
deliver valuable corporate information in print and/or digital form. Last year,
the company was named the second fastest-growing public company in Silicon
Valley by the San Jose Business Journal. Visit Fatbrain.com at
http://www.fatbrain.com.
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