BlueLight.com Launches New Internet Service With Key Benefits for the Online Shopper; Consumers...

Business/High-Tech Editors

SAN FRANCISCO--(BUSINESS WIRE)--Feb. 21, 2001

BlueLight.com today announced a new Internet access service (ISP) tailored to reward online shoppers with Internet connections and special discounts.

BlueLight's new ISP launches March 1 and includes

two convenient tiers and a series of special offers through the BlueLight Rewards(TM) program, such as a month or more of free service for simply purchasing products on the BlueLight.com(TM) online shopping site (www.bluelight.com). At launch, BlueLight will provide its more than six million current Internet service subscribers the opportunity to seamlessly migrate to the new ISP.

BlueLight aims to become the Internet service of choice for the online shopper. The new ISP will include two tiers of service designed with the BlueLight.com customer in mind. With the average American spending 11.25 hours a month on the Internet (Veronis Suhler, 2001), the tiers meet the needs of all users, from the casual Web surfer to the serious Internet fan. Tiers include:

-- BlueLight Basic Free Internet Service: 12 hours free access per month

-- BlueLight Premier Internet Service: 100 hours per month for $9.95

In addition, BlueLight ISP users will receive bonus offers when they shop at the BlueLight.com web site. For a limited time, users who purchase any item at BlueLight.com will receive one month of free Internet access. In addition, shoppers will be able to earn more free months for every $50 spent before tax and shipping, per individual order over $100, for a maximum of six free months. For example, when a shopper spends $165 on one BlueLight.com order, they earn three free months of Internet service from BlueLight Rewards. The BlueLight ISP service and bonus rewards will be available to residents of the continental U.S., age 13 years and older. Terms of service and BlueLight Rewards special offers are subject to change after May 31, 2001. Full service and bonus offer details will be available at www.bluelight.com.

All current subscribers to BlueLight's ISP will have the opportunity to be automatically enrolled in the BlueLight Basic Free Internet Service at launch. They can then choose to upgrade to the BlueLight Premier Internet Service, giving them more than three hours of service a day. Users will enjoy custom BlueLight.com e-mail accounts and will have full access to the Internet. Current subscribers' Yahoo! e-mail accounts will still be valid and can be accessed through the BlueLight ISP.

"Following significant shifts in the ISP market over the past year, BlueLight is now the only major retailer still offering a free Internet service to its valued customers," said Steve Feuling, chief marketing officer of BlueLight.com. "With BlueLight's new ISP, we are creating the ideal Internet service for the online shopper by actually rewarding them with free Web access and significant discounts on our site. No other ISP offers such a value to its consumers."

The BlueLight ISP is an invaluable marketing tool designed to bring people online to shop at BlueLight.com and to help them find out more about products featured at their local Kmart store. Since BlueLight launched its ISP in December of 1999, the company has signed up more than 6.3 million subscribers by leveraging the marketing strengths of Kmart, where more than 30 million people shop each week. BlueLight's ISP is currently the fastest growing Internet service in U.S. history.

BlueLight will promote its new service extensively both online and offline. Throughout the year, BlueLight will roll out millions of CD-ROMs in Kmart stores featuring the ISP software and other third-party content. BlueLight ISP software can also be downloaded at www.bluelight.com/freeinternet.com.

BlueLight's ISP is supported by a nationwide network of local dial-up access providers, including AT&T, Level 3, PSINet, StarNet, Telia Internet and WorldNet. BlueLight's coverage area includes more than 2,000 cities and towns across the country.

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 3,500 Internet shopping kiosks in 1,100 Kmart stores nationwide, and offers in-store returns of all products at any of Kmart's more than 2,100 retail locations. BlueLight's Internet access service currently supports more than six million subscribers. BlueLight.com was formed in 1999 by Kmart Corporation (NYSE:KM) and SOFTBANK Venture Capital with investments by Martha Stewart Living Omnimedia, Inc. (NYSE:MSO). For more information, visit www.bluelight.com.

EDITOR NOTE:

BlueLight.com visuals are available online at ftp://ftp1.bluelight.com