Oxygen Media and Starbucks Enter Into Strategic Alliance; Alliance to Include Creation of Content, Cross-Promotion, Marketing and E-commerce

Business Wire, June 17, 1999

NEW YORK and SEATTLE--(BUSINESS WIRE)--June 17, 1999--

Oxygen Media, the media company that is developing a brand for women on the Internet and cable television, and Starbucks Coffee Company (Nasdaq:SBUX), the world's leading retailer, roaster and brand of specialty coffee, today announced they have entered into a strategic alliance.

The announcement was made by Geraldine Laybourne, Oxygen's chairman and ceo, and Howard Schultz, chairman and ceo of Starbucks.

"We couldn't be more thrilled to be working with Howard Schultz and Starbucks," said Geraldine Laybourne. "Howard has built a powerhouse brand from scratch. Today, Starbucks is an `offline' retailer with the brand values we want to offer the Oxygen audience -- quality, availability, value." Laybourne added that the relationship with Starbucks is an important ingredient in Oxygen Media's strategy to partner with world-class retailers and marketers who offer a wide range of quality products and services.

Starbucks and Oxygen will be working closely to develop an in-depth operating relationship that enhances both organizations' strategies on the Internet and beyond.

"Our alliance with Oxygen Media is one of the early events of our exciting Internet strategy," said Howard Schultz, Starbucks chairman and ceo. "It gives us the opportunity to lower the cost of customer acquisition by fully leveraging the convergence that is now occurring within the Internet, cable and other media channels. We have 10 million customers who visit our locations weekly, and with 70 percent of these customers already on-line, we have an extremely loyal and Internet-savvy customer base."

Schultz said that through Starbucks alliance with Oxygen, as well as other relationships the company will be announcing in the future, "We'll be able to provide a seamless consumer experience through our retail stores, cable and the Internet."

The alliance is expected to feature commerce on Oxygen's network of sites - offering Starbucks products and services - as well as related content and community created by Oxygen and Starbucks, mutual promotion of Internet sites, and Oxygen's in-store promotion at Starbucks retail locations nationwide.

Teaming up with Laybourne, who is one of the leading brand builders of today, along with the equity investment Starbucks made in Talk City, "We are building powerful strategic alliances to become a major destination on the Internet," Schultz said.

He continued, "We believe that Oxygen is uniquely positioned to deliver superior and exciting programming to augment our expanded customer offerings. Oxygen will play a large role in our plan to orchestrate a true convergence of commerce, content and community in the Internet space."

About Starbucks Coffee Company

Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world. In addition to its retail locations in North America, the United Kingdom, the Pacific Rim, and the Middle East, Starbucks sells whole bean coffees through its specialty sales group, direct response business, supermarkets and online at www.starbucks.com. Additionally, Starbucks produces and sells bottled Frappuccino(R) coffee drink and a line of premium ice creams through its joint venture partnerships and offers a line of innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Company.

About Oxygen

Oxygen was founded last year by Geraldine Laybourne to create a media brand that superserves modern women by combining the best qualities of the Internet and television. Since its inception, Oxygen has acquired and developed several online sites, entered into a multi-year anchor tenancy, programming and promotional partnership with America Online, and partnered with Marcy Carsey, Tom Werner, Caryn Mandabach and Oprah Winfrey to develop and launch a new cable network.

Programmed by the principals of Carsey-Werner-Mandabach, the Oxygen cable network will be integrated with Oxygen's existing popular and growing online sites -- Thrive (www.thriveonline.com; Keyword: thrive), Moms Online (www.momsonline.com; Keyword: moms online) and Electra (www.electra.com; Keyword: electra) -- and its new sites, Ka-Ching (www.ka-ching.com; Keyword: kaching) and thelab (www.oxygen.com; Keyword: oxygen). Oprah Online (www.oprah.com; Keyword: Oprah), one of the most popular websites of all, will join Oxygen in August 1999. Oxygen also hosts regular live chats -- called "O2 Live" -- with prominent women in a wide variety of fields.