Virgin Entertainment Group Selects Pentagon Inc. To Enhance Its E-commerce Offerings; Teams With Innovative E-commerce Provider to Further Enhance Customer Experience

Business Wire, Feb 24, 2000

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Feb. 24, 2000

Building on an aggressive Internet strategy, the Virgin Entertainment Group today announced its decision to build its worldwide e-commerce infrastructure on new Internet technology from Pentagon Inc. (http://www.pentagoninc.com).

Pentagon's proprietary applications will be the back-end for the international rollout of Virgin's online Megastores in North America, the United Kingdom and Ireland, Continental Europe and Japan. In addition, Pentagon will host the sites and manage Virgin's worldwide remote fulfillment process.

Pentagon is rapidly becoming a prominent player among companies seeking to "put the clicks in bricks and mortar retail." The Pentagon e-commerce engine offers superior Web-shopping for consumers, making it easier to search Virgin's immense entertainment catalogs, as well as to track and manage their own personal shopping accounts.

Virgin's online Megastore in North America (www.virginmega.com) will begin utilizing the Pentagon engine this Spring. Virgin's international online Megastores will launch throughout 2000. In so doing, Virgin will offer the first truly integrated global offering in the online entertainment retail space.

In addition to the expansion of the online Megastores, Virgin plans to use Pentagon in a central roll in Virgin's U.S.-based "Megastore 2010" project bringing Web-based efficiencies and technologies to in-store retailing. In addition to being Virgin's exclusive e-commerce engine, Virgin has also purchased an equity stake in Pentagon.

Glen Ward, chief executive officer of the Virgin Entertainment Group in North America commented: "This is a great advantage for shoppers who purchase their entertainment online. Virgin is breaking down boundaries that have previously kept people from the music and video entertainment they want. We believe Pentagon's software will be processing billions of dollars in transactions for Virgin over the next few years."

Adam Lilling, CEO and founder of Pentagon, said: "We had already developed the online store system Virgin needed. However, our unique business model and the value to their customers are what ultimately sold them. Like traditional brick and mortar retailing, our agreements are structured along a low monthly lease with gross revenue participation.

"In other words, Virgin's success in online sales is what drives Pentagon's success. From our standpoint, Pentagon couldn't have a better partner than Virgin."

The partnership with Pentagon continues Virgin's aggressive moves in the online space. In the last few months, Virgin Entertainment Group has launched the Virgin Megastore Online (www.virginmega.com); Radio Free Virgin (www.radiofreevirgin.com), the ultimate listening post; and Virgin Jamcast (www.virginjamcast.com), offering digital music without the delays of downloading.

About Virgin Entertainment Group

Virgin Entertainment Group provides consumers with a range of superior entertainment experiences through a family of integrated Virgin-branded businesses. The "category killer" Virgin Megastores and www.virginmega.com are integral parts of a strategy to get consumers who are looking for music, books, video, software and other entertainment content what they want, how they want it, when they want it.

About Pentagon Inc.

Based in Los Angeles, Pentagon (www.pentagoninc.com) is a full-service e-commerce provider that licenses its proprietary commerce engine, provides Web store hosting, and offers integrated services including customer service and fulfillment.