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Option #2 is closest, though I wish the Borders site were nearly as functional as the Kobo site, limited though that one is, especially in the search area.
Borders licensed the backend workings of the Kobo catalogue (all downloads are supplied via the Kobo servers, and the Borders app is a rebranded version of the Kobo Desktop app), but were free to create their own website on top of it. Like the way library e-books are usually "powered by Overdrive" which processes things and handles the listings and checkout, but the libraries can put their own info and logo up and decide how the webpage displays.
This leads to some interesting things, such as when Borders had this promotion for free romance ebooks, whose titles promptly showed up in the Top 50 Bestsellers list for Kobo, even though the books were obviously not selling at such rates there. And you can sometimes find hidden Kobo freebies by checking the Borders time-limited promo page.
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