Exclusive Beastie Boys, Pearl Jam and Coldplay Tracks Headline Amazon.com's New Free Music Downloads Area

Powered by Liquid Audio and Featuring Tracks from The Red Hot Organization, Amazon.com's Free Downloads Community Brings Fans and Artists Together with Thousands of Downloads and Donations to Artists

SEATTLE--Feb. 28, 2001-- Leading online retailer Amazon.com (Nasdaq:AMZN), today announced the launch of its new Free Music Downloads community, designed to help fans discover the music of major-label and independent artists through thousands of free MP3 and Liquid Audio downloads, artist uploads and a unique virtual tip jar.

At launch, the Free Music Downloads area will offer music fans exclusive free downloads from the Beastie Boys, Pearl Jam, Coldplay, Barenaked Ladies and the Eagles -- all available only at Amazon.com -- plus hundreds of other free downloads from major-label artists. In addition, fans will be able to download exclusive tracks from the upcoming Red Hot + Indigo album, including songs by Mary J. Blige, The Roots, Medeski Martin & Wood, Kenny Burrell and others. Tracks by artists including U2, Nirvana, Smashing Pumpkins and David Bowie, which appeared on previous Red Hot albums, will also be available for free download. Finally, the upcoming Red Hot + Indigo CD will be available for purchase exclusively at Amazon.com for a limited time.

Amazon.com's Free Music Downloads area also creates a community that allows independent musicians and fans to come together in truly unique new ways that benefit both artists and fans:

• Virtual Tip Jars: Music fans can support their favorite artist by leaving donations via virtual tip jars, giving artists a new way to get paid.
• Uploading Tracks and Selling CDs: Independent musicians can upload songs for free downloading by Amazon.com's more than 30 million customers, getting access to a worldwide audience -- and driving CD sales. Giving customers the ability to try before they buy is a proven method to drive sales: over the 22 months Amazon.com has offered free downloads, artists offering downloads have seen CD sales increase an average of 40 percent.
• Fueling Discovery via Try Before You Buy: With thousands of free MP3 and Liquid Audio tracks from major-label artists, indie labels and up-and-coming musicians -- and helpful features like editors' recommendations, customer reviews, most popular downloads lists and genre pages -- Amazon.com's Free Music Downloads area offers music fans an ideal way to uncover their next favorite band, at no charge. CDs are merchandised directly next to each download, so upon listening to a download, fans can buy the artist's CD with just a single click.

"We've created the first free music downloads community that benefits everyone involved: fans, artists and labels," said Andy Jassy, general manager of Amazon.com's Music store. "Fans can check out great free music in MP3 and Liquid Audio, artists get exposure to more than 30 million customers -- driving CD sales and tips -- and labels benefit from a proven way to market their artists' releases."

John Carlin, president and founder of The Red Hot Organization, said, "We are excited that Amazon.com and Red Hot have come together to explore ways in which new media can support pro-social issues. Red Hot's music is meant as a positive form of propaganda that enriches our lives as we enjoy its entertainment. Enabling people to download this music is a wonderful new way to get Red Hot's message across while allowing people to donate through Amazon.com's virtual tip jar helps Red Hot continue its mission."

"Downloads are the best way of discovering new music since the invention of radio," said Brett Gurewitz, owner of Epitaph Records, and member of the band Bad Religion. "I'm stoked to be able to expose great Epitaph artists to the millions of Amazon.com customers."

"Liquid Audio provides easy-to-use player software and the powerful backend distribution services that enable Amazon to offer CD-quality music downloads to consumers," said Gerry Kearby, CEO and co-founder of Liquid Audio, Inc. "Liquid Audio's software helps music fans discover new music by providing a simple and logical download experience -- a good fit for the free download area of Amazon.com, one of the most customer-centric retailers in the world."

Songs available for free download beginning today in Amazon.com's new Free Music Downloads community include:

• Tracks from hundreds of major-label artists, including the following:
• Beastie Boys, "Alive" (exclusive, not available on CD, Rapscallion remix)
• Pearl Jam, "Mankind" (exclusive, live version)
• U2, "Night and Day"
• Radiohead, "Dollars and Cents" (live, brand-new song, not available on CD)
• Coldplay, "Spies" (live, exclusive, not available on CD)
• Barenaked Ladies, "Pinch Me" (exclusive, not available on CD, Injeti remix)
• Nirvana, "Verse Chorus Verse"
• Smashing Pumpkins, "Glynis"
• Exclusive tracks from the upcoming Red Hot + Indigo album, including songs by:
• Mary J. Blige, "Do Nothing 'Til You Hear from Me"
• The Roots, "Caravan" (featuring D'Angelo on keyboards)
• Kenny Burrell, "C Jam Blues" (featuring Medeski Martin & Wood)
• Tracks from artists on dozens of independent labels, including the following:
• Epitaph: Tom Waits, Rancid, Offspring, NOFX
• Hannibal: Nick Drake, Taj Mahal, Cubanismo!
• Kill Rock Stars: Sleater-Kinney, Elliott Smith, Bratmobile
• Rounder: Alison Krauss, Jimmie Dale Gilmore, Natalie MacMaster, Johnny Adams
• Moonshine: Carl Cox, Omar Santana, Dave Aude
• Thrill Jockey: Freakwater, Tortoise, The Sea and Cake
• Free downloads from up-and-coming artists

Many of the emerging artists featured in Amazon.com's Free Downloads community, including Stone Coyotes, Nadine, Perla Batalla and Phil Roy, are members of Amazon.com's Advantage program, which enables independent musicians to market and sell their music to Amazon.com's more than 30 million customers worldwide.

In addition to the Red Hot downloads and tipping capability mentioned above, beginning today Amazon.com's Music store will host an online auction featuring Red Hot one-of-a-kind autographed prints, photo books, CDs and other works by well-known actors and musicians, such as Lenny Kravitz, Chris Rock, Drew Barrymore, Sean Penn and R.E.M.

Liquid Audio, Inc. (Nasdaq:LQID) is providing digital music delivery services for free promotional downloads offered through Amazon.com's Free Music Downloads area, including encoding, hosting, delivery and reporting services. Amazon.com and Liquid Audio have been working together for nearly two years on the distribution of free promotional downloads due to Liquid's simple and logical customer experience.

Amazon.com's Free Music Downloads community can be accessed via its Music store, www.amazon.com/music or by going directly to www.amazon.com/music-downloads. For more information about the upload program, or to join, visit: www.amazon.com/music-uploads. For more information about Amazon.com Advantage, visit www.amazon.com/advantage/music. For more information about the Amazon.com Red Hot auction, visit the Amazon.com Red Hot Store, located at www.amazon.com/music-redhot.

About Amazon.com's Music Store

Amazon.com is the No. 1 online music store, located at www.amazon.com/music. From alternative to zydeco, hip-hop to bebop, Amazon.com's Music store offers its customers everything from the latest releases to hard-to-find gems in any music genre. Amazon.com offers more than 300,000 new and used CDs, vinyl LPs and cassettes, at everyday low prices. In addition, the Amazon.com Music store features thousands of reviews by Amazon.com's expert staff editors and nationally known critics; song samples; thousands of free, full-length downloads from major-label and independent artists; artist interviews; lists of essential albums by style, artist, composer and year; helpful introductions to classical, jazz, and international music; thousands of bestseller lists; and personalized music recommendations.

About Amazon.com, Inc.

Amazon.com (Amazon.com, Inc., and its subsidiaries) is the Internet's No. 1 retailer. Amazon.com (Nasdaq:AMZN) opened its virtual doors on the World Wide Web in July 1995 and today offers Earth's Biggest Selection, along with online auctions and free electronic greeting cards. Amazon.com seeks to be the world's most customer-centric company, where customers can find and discover anything they might want to buy online. Amazon.com lists more than 28 million unique items in categories such as electronics, kitchen products, books, music, DVDs, videos, camera and photo items, toys, software, computer and video games, tools and hardware, lawn and patio items, and wireless products. Through Amazon.com zShops, any business or individual can sell virtually anything to Amazon.com's more than 30 million cumulative customers, and with Amazon.com Payments, sellers can accept credit card transactions, avoiding the hassles of offline payments.

Amazon.com operates four international Web sites: www.amazon.fr, www.amazon.co.uk, www.amazon.de and www.amazon.co.jp. It also operates the Internet Movie Database (www.imdb.com), the Web's comprehensive and authoritative source of information on more than 250,000 movies and entertainment titles and 1 million cast and crew members dating from the birth of film in 1891 to 2003.

Amazon Anywhere is the leader in mobile e-commerce, providing access from anywhere in the world to Amazon.com, Amazon.co.uk and Amazon.de on personal digital assistants (PDAs) and through handheld wireless Internet devices that use HDML or the Wireless Application Protocol.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties that include, among others, Amazon.com's limited operating history, anticipated losses, significant amount of indebtedness, unpredictability of future revenues, potential fluctuations in quarterly operating results, seasonality, consumer trends, competition, risk of distribution center expansion, risks related to fourth quarter performance, risks of system interruption, management of potential growth, inventory risks, risks related to auction and zShops services, risks related to fraud and Amazon.com Payments, and risks of new business areas, international expansion, business combinations, strategic alliances and the Amazon Commerce Network. More information about factors that potentially could affect Amazon.com's financial results is included in Amazon.com's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and 10-K/A for the year ended December 31, 1999, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June 30, 2000, and September 30, 2000.

About Liquid Audio

Liquid Audio, Inc. is a leading provider of software and services for the digital delivery of music over the Internet. The Liquid Audio solution gives musicians, record labels, Web sites and music retailers the ability to publish, syndicate and securely sell recorded music online with copy protection and copyright management. Using the Liquid(TM) Player software, available for free download at www.liquidaudio.com, music fans can preview and purchase downloadable music from the more than 1,000 affiliate Web sites in the Liquid Music Network (SM). Traded on Nasdaq under the symbol LQID, Liquid Audio is located in Redwood City, California.

About The Red Hot Organization

The Red Hot Organization is the entertainment industry's leading organization dedicated to fighting AIDS through popular culture around the world. Over the past 10 years, Red Hot has produced 13 groundbreaking albums and related television specials, incorporating the talents of leading performers, producers, directors, and visual artists to raise funds and awareness for HIV and AIDS. Through projects such as Red Hot + Blue, No Alternative, America Is Dying Slowly, Red Hot + Rio and Red Hot + Indigo, and with the help of artists like Madonna, U2, Nirvana, The Roots, Sarah McLachlan, David Byrne, the Beastie Boys, David Bowie, Wu-Tang Clan, George Michael, Jim Jarmusch and Hal Hartley to name a few, Red Hot's efforts have raised over $10 million for AIDS prevention and relief around the world. To find out how to make a difference in the fight against AIDS, visit www.redhot.org.