A front-page story in the New York Times on February 8 about Amazon.com's practice of selling space and listings to publishers has set off an examination of the co-op policies of other online booksellers by the media. PW's survey of co-op practices turned up ambitious plans at barnesandnoble.com and co-op already in in place at Books.com.

Reacting to the story in the Times, Amazon has changed several of its co-op policies. Under its new guidelines, beginning March 1, Amazon will "list for customers which feature placements on its site are paid for and which are not." Amazon spokesman Bill Curry told PW that the company is still "developing the mechanics" of the list and would not comment on whether a visitor to the site would have to click on an icon to see the list. The company apparently won't label any of the placements. Amazon founder Jeff Bezos said, "We believe we're the first retailer to list this information for customers, and we hope it will start a trend."

The controversy over Amazon's decision not to inform its customers that some of its highlighted books are supported by publisher co-op money arises from the hybrid nature of online bookselling. On the one hand, online bookstores are retailers, but many online booksellers offer book reviews, recommendations and other resources to assist visitors in their purchasing decisions. In the nondigital world, the two are neatly separated. Magazines and newspapers that review books accept publisher ads, which are easily recognizable as such and are distinct from editorial. Like most general retailers, bookstores use co-op money for a variety of things from placement in the store to newsletter support. Amazon, a kind of review medium that allows users to buy a book immediately, is still negotiating a line between the two.

Amazon also announced that it is starting a new returned-books policy "to underscore that it stands behind all of its recommendations." While the company used to accept returned books only if they were unread and in new condition, it will now accept any book it recommends in any condition.

The Times story focused on the Amazon packages -- introduced last year and expanded last month -- that cost up to $12,500 and allow a book to have a top slot on category home pages, an author profile or interview and "complete Amazon.com editorial review treatment." This last includes being listed as "destined for greatness," and "what we're reading." A basic listing with information, reviews and readers' comments is free.

Some publishers who have participated have been delighted with the results of the program. Some smaller publishers fear that when it is expanded to include them, they will not be able to afford to participate.

Amazon defended its policy by saying that it took payment on titles that its editors had already selected. The company also noted that co-op money is used by chains and independents to highlight books -- from some chains' acceptance of publisher money for various in-store displays to independents who participate in window contests.

B&N.com Readies Its Plan

In papers obtained by PW, barnesandnoble.com has proposed a complex structure for publisher-driven content on its site. For example, a feature on the B&N.com home page would cost $250 under the proposal, with a two-day-minimum guarantee. Placement on a subject page (Africana, Biography, Romance, Teens, etc.) would depend on the season, and would have a three-day guarantee. Spots on the Bargain Books Home Page would go for $50 per title per day, while on-site promotional banners will cost $125 per title per week.

By comparison, an endcap at a Barnes &Noble brick-and-mortar store runs about $3000 per title, window signs cost $10,000 and floor displays $12,500.

In the B&N.com documents, the company urges clients to "use the Web's hottest storefront window, to focus the world, literally, on any new product." Of its Computer Books home page, B&N.com boasts "a number of high-profile spaces showcasing titles with attention-grabbing headlines."

As a result of its partnership with America Online, B&N.com also has plans to offer packages with that service, according to the documents. Placement on the Barnesandnoble@aol home page and the AOL sign-off screen would run $250 per title per day. Barnesandnoble.com would also offer packages with its affiliates as well as create individual product pages within B&N.com for a minimum of one year.

Of course, the recent backlash against Amazon and the dynamic nature of online bookselling may cause some of these plans and prices to change.

B&N.com chief executive Jonathan Bulkeley told the Times that its service would have clear distinctions between editorial and advertising, possibly by graphically separating advertising from editorial text. Questions remain as to how Barnesandnoble.com will accomplish that goal. The company did not return calls for comment.

Some publishers feel that an ambitious B&N co-op plan can only benefit publishing houses. "The brick-and mortar B&N charges you for everything," said a publisher, who requested anonymity. "They tell you what they're going to do. You pay the price, they deliver and it sells books."

Executives at another major online player, Books.com in Cleveland, told PW that it already sells co-op ads. Publishers can purchase space on the "What's New" section of its home page. A newsletter and banner ads are also subject to publisher participation. The company did not say how much it charged for packages.

While Books.com d s not currently distinguish between publisher-driven and editorial content, spokesman Jack Bashian said that "all the editorial areas are clearly editorial." He added that in light of Amazon's shift, "it might not be a bad idea" to begin posting some type of disclosure.