BlueLight.com to Acquire Select Assets of Spinway,Inc.; BlueLight.com Continues to Support Its...

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--Dec. 4, 2000

BlueLight.com(TM), an independent e-commerce company majority-owned by Kmart Corporation (NYSE:KM), today announced the acquisition of selected assets of Spinway, Inc., the Internet infrastructure

"The cost of acquiring the core assets of Spinway was very modest for BlueLight and will have little impact on our current march towards profitability," said Mark H. Goldstein, CEO of BlueLight.com. "We remain dedicated to our subscribers. BlueLight's Internet service is an invaluable marketing tool for the company and we feel it is in our best interest, and in the best interest of all our subscribers during these tough times for pure-play dot com companies, to make sure it continues."

Through the deal, BlueLight will acquire all intellectual property and selected other assets of Spinway, in addition to retaining a group of key employees. These assets will be absorbed into the company and will function as a unit within BlueLight itself. BlueLight will maintain Spinway's current network of local Internet dial-up providers. Following the acquisition, Spinway itself will cease to exist as a company.

"We fully support BlueLight in its decision to acquire the assets of Spinway in order to maintain its Internet service," said Randy Allen, executive vice president of strategic planning and chief information officer of Kmart. "Kmart and BlueLight both feel online shopping is a luxury everyone should be able to afford, especially during the busy holiday months. We want the Kmart customer to have an enjoyable, fulfilling shopping experience, whether it be online at BlueLight.com or in one of our more than 2,100 stores nationwide."

The transition from Spinway to BlueLight is expected to be seamless and subscribers will see no lapse in service. BlueLight is also currently working with other companies that offer Internet access through Spinway regarding continuing their service through BlueLight.

BlueLight started its Internet service in December of 1999 as a marketing tool to bring the more than 30 million consumers who shop at Kmart each week online to experience the BlueLight.com online shopping site. The service currently boasts more than 5.2 million subscribers after just 11 months, making it the fastest growing ISP in U.S. history. BlueLight.com averages more than 12,000 subscriber sign-ups per day and distributes ISP CD-ROMs in more than 1,400 Kmart stores nationwide. The service is available for the PC and Macintosh, and includes a Spanish-language version (PC only).

About BlueLight.com

Based in San Francisco, BlueLight.com is an independent company formed to leverage the substantial assets of Kmart Corporation, the nation's second-largest discount retailer. As Kmart's e-commerce channel, BlueLight's goal is to meet the online shopping needs of the more than 30 million Americans who visit a Kmart retail location each week, turning those consumers into BlueLight customers by offering "Great Brands at BlueLight Prices."

BlueLight operates the BlueLight.com online shopping site (www.bluelight.com), which features hundreds of thousands of products across multiple categories, including Martha Stewart Everyday(R), Sesame Street, Nickelodeon, Route 66 and other nationally recognized brands. BlueLight also runs 3,600 Internet shopping kiosks in 1,200 Kmart stores nationwide, and offers in-store returns of all products at any of Kmart's more than 2,100 retail locations. BlueLight's 'free' Internet access service currently supports more than six million subscribers. BlueLight.com was formed in 1999 by Kmart Corporation and SOFTBANK Venture Capital with investments by Martha Stewart Living Omnimedia, Inc. (NYSE:MSO). For more information, visit www.bluelight.com.