Overstock.com Investor

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May 19, 2004 at 12:00 AM EDT
Overstock.com First to Use Utah Spyware Control Law to Fight Predatory Marketers

SALT LAKE CITY, May 19, 2004 /PRNewswire-FirstCall via COMTEX/ -- Overstock.com (Nasdaq: OSTK) today announced its intention to lead the charge against spyware by availing itself of the recently enacted Utah Spyware Control Act (HB 323), which went into effect May 3. Under the provisions of this law, Overstock.com has filed a complaint against Massachusetts-based online retailer SmartBargains, Inc. in the Third District Court in Salt Lake City.

Spyware is software that is surreptitiously installed on a personal computer for the purpose of collecting certain information from that computer and enabling marketers to barrage the user with unwanted pop-up ads while browsing the Internet. More insidious forms of spyware also collect password, credit card and other personal information.

Spyware is installed on a computer (often without the owner's knowledge) when someone using the computer downloads free software programs from the Internet such as free email software, Web browsers, digitial music file-sharing programs, and games.

Utah was the first state to pass an anti-spyware bill, but it has become a national issue and other states are considering passing similar laws. Overstock.com supported the Utah bill and participated in efforts to get the bill passed, believing that using spyware to deliver pop-up ads over other companies' Web sites constitutes predatory advertising, unfair competition, and is a nuisance for consumers.

Since the Utah Spyware Control Act, Overstock.com believes it has observed SmartBargains using spyware to display pop-up ads over the Overstock.com Web site, and that this has been occurring within the State of Utah in violation of the new Utah law. Overstock.com seeks injunctive relief, damages, attorney's fees and other costs arising from SmartBargains' actions.

Overstock.com President Patrick Byrne said, "Pop-up ads have been to Web browsing what spam is to email. Within the world of affiliate marketing, such software is often called 'parasiteware' on the grounds that the companies which distribute such code and those who advertise through it are parasitic on legitimate commerce: spyware hijacks not only consumer spending, but the commissions that would otherwise be paid to legitimate affiliate community. Several years ago we decided on principle to cease any advertising with such firms, and have encouraged members of the vast affiliate marketing community to respect the position we have taken by refusing to act as affiliates for sites that avail themselves of parasiteware."

About Overstock.com

Overstock.com Inc. is an online "closeout" retailer offering discount, brand-name merchandise for sale over the Internet. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory liquidation distribution channel. Overstock.com is a publicly traded company listed on the NASDAQ National Market System, headquartered in Salt Lake City, and can be found online at www.overstock.com.

Overstock.com is a registered trademark of Overstock.com, Inc. All other trademarks are the property of their respective companies.

This press release contains certain 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. Such forward-looking statements include, but are not limited to, statements regarding other states passing spyware regulation. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, but not limited to, our limited operating history, our ability to manage growth, a general downturn in economic conditions, and such other risks as identified in our Form 10- K for the year ended December 31, 2003, and all our subsequent filings with the Securities and Exchange Commission, which contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

SOURCE Overstock.com, Inc.

Media, Scott Blevins, +1-801-947-3133, sblevins@overstock.com,
or Investors, Kathryn Huang Hadley, +1-801-947-3282, khuang@overstock.com,
both of Overstock.com, Inc.
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