Bertelsmann to hand shopping site to start-up
The German media conglomerate will sell its comparison-shopping site to DealTime and form a European joint venture with the U.S.-based e-commerce service.
Under the deal, Bertelsmann will invest an undisclosed sum in DealTime Europe, the joint venture, for a 49 percent stake in the company. The media giant will also make an investment in the start-up's parent, DealTime Ltd.
The companies said the agreement is worth about $100 million.
The deal follows an indefinite postponement of the media giant's initial public offering plans for its online bookstore because of the recent decline in Internet stocks. Several high-profile Net companies, including Boo.com and Digital Entertainment Networks, have recently closed shop after struggling to survive in the increasingly discriminating market.
Privately held DealTime, which lets consumers compare prices and brands from a variety of merchants online and off, will bolster its services with content and software from Bertelsmann's Evenbetter.com site, formerly DealPilot.com.
Through the venture, DealTime will fold Evenbetter's properties into its U.S. and European sites, which operate in Germany and the United Kingdom. DealTime Europe, based in Heidelberg, Germany, plans to offer services in France and Italy later this year.
"Looking at the e-commerce landscape, we saw DealTime as the overall leader in comparison shopping and Evenbetter as the niche leader within the books, music and movies categories," Klaus Eierhoff, CEO of Bertelsmann Multimedia and board member of Bertelsmann, said in a statement.
"We think this combined entity will be best suited to capitalize on the potential for e-commerce in Europe and around the globe."
In February, DealTime, based in New York, received $50 million in third-round financing from a group of investors including Bain Capital, America Online, Time Warner and Bank of America.