Columbia House Selects Coremetrics to Provide Intelligent Analysis of Online Customer Behavior

Coremetrics Business Intelligence Solutions Enable Home Entertainment Giant and Top-5 Retail Web Site¹ to Improve Customer Acquisition and Enhance Customer Loyalty

San Francisco, Calif. - July 23, 2001 - The Columbia House Company, (www.columbiahouse.com) the world's largest direct marketer of music, DVD and video home entertainment products, and Coremetrics™, Inc. (www.coremetrics.com), a leading provider of data-driven business intelligence solutions today announced that Columbia House has selected Coremetrics to provide customized analysis of online customer behavior for Columbiahouse.com's popular music, DVD and video entertainment clubs. Coremetrics' business intelligence solutions will enable Columbia House to increase advertising effectiveness, maximize direct marketing efforts, and improve Web site usability.

"The Columbia House Company's selection of Coremetrics is a real triumph for our company and a strong vote of confidence for the compelling value of our business intelligence solutions," said Scott Kauffman, president and CEO of Coremetrics. "Intimate knowledge of customer behavior is critical for companies striving to improve customer interactions and predict buying habits. Our business intelligence solutions provide highly customizable data capture and intelligent business analysis which enable sophisticated direct marketers such as Columbia House to run their business more efficiently."

Coremetrics' Core Data Platform™ and Coremetrics' eLuminate Commerce™ will allow Columbiahouse.com to measure the success of online advertising campaigns, enhance user experience, and determine the most valuable affiliate relationships. Columbia House will use eLuminate Commerce and customized reports from Coremetrics to analyze the click-stream patterns of customers to ensure that the online browsing and buying experience is efficient and rewarding. eLuminate Commerce is an award-winning Web analytics service that provides dynamic segmentation, allowing Columbiahouse.com to better understand their customers based on any number of variables and generate highly targeted promotions.

"Much of our Internet strategy is reliant upon highly targeted advertising and promotions," said Bill Ostroff, President of Columbiahouse.com. "The in-depth analysis and customized reporting that Coremetrics provides will enable us to invest marketing dollars more effectively and reduce the cost of doing business. At the same time we expect that the insights provided by this analysis will enhance our ability to fine tune our online promotions and web site design to better match the interests of our club members and prospects."

"We selected Coremetrics because they offer unparalleled analytics and customized reporting about the preferences of our online audience," said Warren Clamen, Vice President Finance of Columbiahouse.com. "We plan to leverage this valuable information to improve the online customer experience, and provide better services for our loyal club members."

Coremetrics Business Intelligence Solutions
Coremetrics' business intelligence solutions consist of a Core Data Platform™ and a Web analytics service, eLuminate Commmerce™. Coremetrics' Core Data Platform is a data warehouse of comprehensive and accurate online customer behavior for analysis using eLuminate Commerce, custom reporting by Coremetrics, and integration with third-party CRM and data mining applications. eLuminate Commerce is an award-winning Web analytics service that enables companies to understand customer behavior and make informed business decisions that decrease customer acquisition costs, increase customer retention and improve browser-to-buyer conversion ratios. eLuminate Commerce extracts granular customer data from the Core Data Platform to deliver business analysis that allows companies to quickly create customer segments, maximize marketing ROI, and improve online merchandising. Coremetrics' business intelligence solutions are complemented by a professional services team that delivers tailored data capture services, customized reporting and in-depth analysis that allow businesses to improve customer relationships within the online channel and across the enterprise.

About Coremetrics
Founded in May 1999, Coremetrics is a provider of data-driven business intelligence solutions that enable companies to improve interactions with their customers based on a complete understanding of online behavior. Coremetrics' data capture, storage and decision-support services provide a complete model of customer interaction online that is extensible for enterprise-wide use with third party Customer Relationship Management and data mining applications. Coremetrics' customers include The Columbia House Company, Hanover Direct, Sundance Catalog Company, Walmart.com and Wilsons Leather. Coremetrics is headquartered in San Francisco with research and development offices in Austin, Texas. The company is privately held with funding from Accel Partners, General Catalyst, and Highland Capital Partners. To learn more about Coremetrics, visit the company's Web site at www.coremetrics.com or call 877-721-CORE.

About Columbia House
The Columbia House Company is the world's largest direct marketer of music, videos and DVD home entertainment product. With more than 16 million offline and online club members in the United States, Canada and Mexico, the company provides direct-to-consumer marketing of more than 12,000 music titles and 7,000 video and DVD titles through its entertainment clubs. The company's web site, www.columbiahouse.com, is one of the premier e-commerce brands and consistently ranks among the Web's top 10 retail sites, and is a leading online advertiser. Since its inception in 1955, The Columbia House Company has a proven record of excellence in database marketing, market segmentation, credit screening and niche market merchandising. Headquartered in New York City, The Columbia House Company is a general partnership owned equally by Sony Corporation and AOL Time Warner, Inc.

Coremetrics, eLuminate Commerce and Core Data Platform are trademarks of Coremetrics, Inc. Any other marks used in this document are trademarks or registered trademarks of the manufacturers or marketers of the products with which the marks are associated.

1 Source: Jupiter Media Metrix, June 2001