Bertelsmann Goes With the Amazon Current

27 November 2002

Bertelsmann, Europe’s largest media group, is set to take a further step back from its ecommerce activities and will next week unveil details of an outsourcing deal with the planet’s largest etailer,

Amazon, which like many another e-venture, has yet to discover its (profit) source, is busily hawking its unused logistics capacity, Bertelsmann being the latest in a string of ebusinesses eager to reduce operational overheads via the Amazonian route. These include, Virgin Megastores, Toys R Us and

Amazon will assume the day-to-day back-office functions for Bertelsmann’s online music store Cdnow in return for a commission on sales. The German group, however, retains absolute ownership of the brand and its website

The deal leaves Bertelsmann's US music club BeMusic – the owner of the Cdnow business – free to focus on the promotion of its own higher-margin products via the website. Specifically, the music it licenses, manufactures and sells to club members through its hard-copy catalogues.

BeMusic confirmed it had reached an agreement with Amazon, but declined to disclose further details.

Data sourced from: Financial Times; additional content by WARC staff