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CDnow Dethrones Amazon as Leader in Online Buyers

Strategic Insights

— 1 min read

CDnow.com has surpassed Amazon.com as the leader in total online buyers, according to PC Data Online. The music e-tailer's strong growth, driven by a 28% jump in traffic and over 1 million unique buyers, has propelled it to the top spot. This significant shift has occurred just as CDnow announced the demise of its merger plan with Time-Warner Inc. and Sony Corp's Columbia House, replacing it with an agreement that maintains CDnow's independence while securing a $51 million investment from Time Warner and Sony.

Key Takeaways:

  • CDnow has surpassed Amazon as the leader in total online buyers, with over 1 million unique buyers in February.
  • The music e-tailer's traffic surged 28% in February, outpacing Amazon's growth.
  • CDnow's sales conversion rate is 12%, compared to Amazon's 8%, indicating a stronger correlation between traffic and sales.
  • The merger plan between CDnow, Time-Warner Inc., and Sony Corp's Columbia House has been canceled, replaced by an agreement that secures $51 million in investment.
  • Amazon's unique buyers declined below 1 million for the first time since last August, with 984,000 buyers in February.
  • The three companies involved in the canceled merger plan have pledged $21 million in cash as an equity investment and a $30 million short-term loan to CDnow.

Statistics:

  • Over 1 million unique buyers for CDnow in February (PC Data Online).
  • 28% jump in traffic for CDnow in February (PC Data Online).
  • 12% sales conversion rate for CDnow (PC Data Online).
  • 8% sales conversion rate for Amazon (PC Data Online).
  • 984,000 unique buyers for Amazon in February (PC Data Online).
  • $51 million in investment secured from Time-Warner Inc. and Sony Corp's Columbia House (News Release by Time Warner and Sony).
  • $21 million in cash as an equity investment from Time-Warner Inc. and Sony Corp's Columbia House (News Release by Time Warner and Sony).
  • $30 million short-term loan from Time-Warner Inc. and Sony Corp's Columbia House (News Release by Time Warner and Sony).

Sources:

  • PC Data Online, "CDnow Ousts Amazon as Online Retailer Leader"
  • Newsbytes.com, "CDnow EDGES OUT AMAZON AS TOP RETAIL SITE"
  • PC Data Online, http://www.pcdataonline.com (accessed March 13, 2000).

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