Blue Nile Reports $10.1 Million in First-quarter Sales; Leading Online Jewelry Retailer Bests Traditionally Strong Holiday Season Figures.

Business Editors

SEATTLE--(BUSINESS WIRE)--May 2, 2000

Blue Nile Inc., the leading online retailer of diamonds and fine jewelry, today announced first-quarter sales of $10.1 million, topping previously reported fourth-quarter holiday revenue.

Sales for the fourth quarter of 1999 -- typically the strongest quarter for retailers -- were $9.5 million. During the first quarter of 2000, the company also expanded its highly regarded product line with the introduction of exquisite pearl jewelry and color gemstone collections.

"The fact that our first-quarter revenue was above the fourth quarter is tremendous -- this is virtually unheard of in traditional retail settings where the fourth quarter is the heaviest sales quarter of the year," said Mark Vadon, chief executive officer of Blue Nile Inc. "Consumers are responding to our core business philosophy -- providing high quality products and an exemplary customer experience. We've also seen strong growth in our referral and repeat customer sales - the key to building our brand and enhancing our position as a leading online resource for diamonds and fine jewelry."

In addition to positive consumer feedback, Blue Nile has received strong and renewed attention from the investment community, and recently announced the closing of a funding round, led by Paul Allen's Vulcan Ventures Inc.

"Blue Nile continues to prove the strength of their core business model," said Joanna Strober, a director of Blue Nile and general partner of Bessemer Venture Partners, one of Blue Nile's principal investors that recommitted funds in the latest financing round. "By focusing on the brand- and information-void in the diamonds and fine jewelry market, Blue Nile has been able to fill the needs of consumers wanting guidance, top quality merchandise and a pressure-free environment in which to shop for these fine goods."

About Blue Nile Inc.

Blue Nile Inc., located on the Web at www.bluenile.com, is the leading online retailer of diamonds and fine jewelry. The company provides consumers with in-depth education and guidance about buying diamonds and classically styled jewelry, and offers an exceptional collection, selected according to high standards of quality, beauty and value. Blue Nile offers rich content and education for first time buyers, who can use the Blue Nile Buyer's Guide to learn the four "Cs" -- cut, color, clarity, and carat weight. With this knowledge, Blue Nile allows customers to confidently make non-pressured, informed purchases. Independent testing labs grade each diamond, and all jewelry is backed by an appraisal and 30-day return policy.

Founded on a philosophy of exceptional customer service, Blue Nile combines 100 years of jewelry trade expertise with a clean, elegant shopping environment. Based in Seattle, Wash., Blue Nile is privately held with investments from Bessemer Venture Partners; Trinity Ventures; Kleiner, Perkins, Caufield & Byers; Weiss, Peck & Greer Venture Partners; Integral Capital Partners; Vulcan Ventures Inc., and Comdisco Ventures. The company can be reached by phone at 800/242-2728.