Profile: Blue Nile, Inc. (NILE.O)

Blue Nile, Inc., incorporated on March 18, 1999, is an online retailer of diamonds and jewelry in the United States. In addition to sales of diamonds, fine jewelry and watches, the Company provides guidance and support to enable customers to more effectively learn about and purchase diamonds as well as classically styled fine jewelry. The Company serves consumers in over 40 countries and territories all over the world and maintains its primary Website at www.bluenile.com. The Company also operates the www.bluenile.co.uk and www.bluenile.ca websites. The Company derives its revenues through its three websites: www.bluenile.com, www.bluenile.ca and www.bluenile.co.uk.

During the fiscal year ended 2008, the Company expanded its operations to offer products for sale to customers in over 35 additional countries and territories throughout the world. The Company’s Websites showcase tens of thousands of independently certified diamonds and styles of jewelry, including rings, wedding bands, earrings, necklaces, pendants, bracelets and watches. Blue Nile specializes in the customization of diamond jewelry with its Build Your Own feature that offers customers the ability to customize diamond rings, pendants and earrings. The Company’s Website features interactive search functionality that allows its customers to find the products that meet their needs from its range of diamonds and jewelry.

Blue Nile’s merchandise consists of diamonds and jewelry, with a particular focus on engagement diamonds and settings. The Company’s diamond supplier relationships allow it to display suppliers’ diamond inventories on the Blue Nile Websites for sale to consumers without holding the diamonds in its inventory until the products are ordered by customers. Blue Nile’s agreements with suppliers are typically multi-year arrangements that provide for certain diamonds to be offered online to consumers only through the Blue Nile Websites.

Diamonds represent the significant component of the Company’s product offerings. Blue Nile offers diamonds with specified characteristics in the areas of shape, cut, color, clarity and carat weight. Customers may purchase customized diamond jewelry by selecting a diamond and then choosing from a variety of ring, earring and pendant settings that are designed to match the characteristics of each individual diamond. The customized product is then assembled and delivered to the customer, typically within 3 to 4 business days.

The Company offers a range of jewelry products to complement its selection of customized diamond jewelry. Blue Nile’s selection includes diamond, platinum, gold, pearl and sterling silver jewelry and accessories. The Company’s jewelry assortment includes settings, wedding bands, earrings, necklaces, pendants, bracelets and watches.