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BERTELSMANN DROPS ITS AOL ALLIANCE TO FOCUS ON CONTENT PROVISION

News, 05 June 2000


Bertelsmann is withdrawing from its European joint venture with America Online. The imminent exit will clear the decks for the German media giant to meld its e-commerce activities into a single unit, preparatory to a major drive into media content and services for wireless internet networks.

Bertelsmann, whose activities range from publishing and printing to book clubs, music and TV, will now focus on providing web content and services for other ISPs. To spearhead the new strategy, it has appointed Andreas Schmidt, 39, former chief executive of its AOL Europe online venture. According to Herr Schmidt, the new unit, branded Bertelsmann E-Commerce Group, will have 1,500 employees and annual sales of around $500 million (€530.6m).

Meantime, in a separate move, Bertelsmann’s online bookstore BOL aims to rack-up the pressure on market leader Amazon.com. The German company is currently in discussion with US online bookseller Barnes & Noble with the aim of forging closer links.

Bertelsmann is also expected to announce later this week the sale of its ISP MediaWays to Telefonica of France.

News source: Wall Street Journal