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News Release

Staples Makes Strategic Internet Investments in HotOffice and DSL.net; ...Marketing Partnerships Help Staples Better Serve Small Business...
    Business Editors

    FRAMINGHAM, Mass.--(BUSINESS WIRE)--Aug. 18, 1999--Staples Inc. (NASDAQ:SPLS) today announced it has made strategic investments in two e-commerce companies: HotOffice Technologies, Inc., a Web-based intranet service provider, and DSL.net, a provider of high-speed Internet access. In addition, Staples has indicated an interest in purchasing up to $5 million of common stock from DSL.net at its IPO.

The agreements include significant cross-marketing initiatives, and both companies' services will be marketed to Staples customers online, in the company's retail stores and through direct marketing. The companies also will be linked to Staples' home page.

"The Internet has leveled the playing field for small businesses who now have access to technology and information services that previously were out of their league in terms of price," said Staples' Chairman and Chief Executive Officer Thomas G. Stemberg. "Staples is dedicated to being a one-stop e-commerce shop for small business, and by partnering with well-run, dedicated industry leaders, such as HotOffice and DSL.net, we will be able to deliver additional customer value."

Staples has invested $6 million in HotOffice Technologies, Inc. (www.hotoffice.com), an e-company that provides simple, low-cost Web-based intranet services to small businesses as an alternative to expensive, technically complex solutions. For a low monthly subscription fee, users have anytime, anywhere access to a powerful suite of collaboration and communication tools in one simple, easy-to-use interface. HotOffice provides document management, Web-based e-mail, group calendar, group contact manager, bulletin boards, online conference rooms, a business resource center and other tools.

"Our partnership with Staples fits perfectly into our overall strategic goal of providing small businesses with the tools and resources they need to survive in today's competitive landscape," said R. Michael Franz, chairman and chief executive officer of HotOffice Technologies, Inc. "By continuing to partner with leading companies that have an existing presence in the small business marketplace, we are able to draw upon their extensive customer base while supplying them with a unique value-add solution to help them retain that relationship with their customer."

To help seed another company that is effectively serving the needs of small- to medium-sized businesses, Staples invested $3.5 million in DSL.net, which provides high-speed data communication services and Internet access via digital subscriber line technology. DSL technology significantly increases the speed of Internet access through traditional copper telephone wires at less cost than other technology methods, such as T1 lines or frame relay. The company plans to be operational in more than 60 second and third tier cities in the U.S. by the end of the year.

"Because Staples and DSL.net target the same small- to medium-sized businesses, this relationship opens many opportunities for both organizations," said David Struwas, DSL.net's president and chief executive officer. "Now Staples customers can purchase eBusiness enabling Internet access from a source they trust for business supplies and services."

About Staples

Staples Inc. is a $7 billion retailer of office supplies, furniture and technology to consumers and businesses from home-based businesses to Fortune 500 companies in the United States, Canada, the United Kingdom and Germany. Headquartered outside Boston, Staples invented the office superstore concept and today is the largest operator of office superstores in the world. The company has over 44,000 employees serving customers through more than 1,000 office superstores, mail order catalogs, e-commerce and a contract business. More information about the company is available at http://www.staples.com.

Certain information presented within this news release may constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which are discussed in our most recent 10-Q and the prospectus for the secondary offering of common stock and other documents on file with the Securities and Exchange Commission.

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     CONTACT: Staples Inc. 
              Media Contact:
              Shannon Lapierre, 508/253-8468
              shannon.lapierre@staples.com
              or        
              Investor Contact:                                 
              Catherine Woods, 508/253-7342
              catherine.woods@staples.com

     KEYWORD: MASSACHUSETTS
     INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS RETAIL