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Amazon buys stake in Audible

Audible (Nasdaq: ADBL), which delivers spoken word content over the Internet, said Monday that (Nasdaq: AMZN) would take a 5 percent stake in the company. Audible also reported a smaller than expected loss.

Under the terms of the Amazon deal, Audible will pay Amazon $30 million over three years in exchange for promotions. Amazon will buy a 5 percent stake in Audible at market prices. Audible closed at $15 Friday.

The alliance will Audible exposure to Amazon's 16 million customers. Audible's web site features selected audio content from The Wall Street Journal and daily digests of The New York Times among others. Audible also provides audiobook bestsellers and classics.

Audible, which went public in July priced at $9, said the Amazon alliance will boost revenue in the second half of 2000, but require the company to invest in marketing and infrastructure. The agreement should boost earnings in the second half of 2001.

And Audible could sure use the revenue boost. In the company's fourth quarter, also announced Monday, Audible reported sales of $420,263, compared to $95,950 in the same quarter a year ago.

The company lost $5.37 million, or 21 cents a share, in the fourth quarter. First Call Corp. consensus called for a loss of 22 cents a share. Audible said its customer base jumped 54 percent sequentially to 13,300.

In a statement, Audible chairman Donald Katz said he was confident Audible's partnership with S3 Inc. (Nasdaq: SIII) would boost customers. S3's Diamond Rio 500 MP3 player will include Audible technology.

For 1999, Audible reported revenue of $1.74 million and a loss of $13.5 million, or 85 cents a share.