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Amazon, CDNow make it official

Media giant Bertelsmann will let Amazon handle inventory, fulfillment and other services for its online record store.

CDNow will open a new store through, joining a number of retailers that are turning to the online sales giant.

As previously reported, the two companies had been in talks for some time. CDNow is owned by German media giant Bertelsmann, which has been struggling with its Internet operations. Bertelsmann said it plans to focus more on books and its music club business.

CDNow will remain part of Bertelsmann unit BeMusic, which also controls the BMG Music Service and record club businesses. Amazon's own music, video and DVD stores will also continue to operate separately.

The multiyear agreement, announced Wednesday, calls for Amazon to handle fulfillment, inventory, content and customer service for CDNow's site. Specific financial terms of the deal were not released.

Amazon has been branching out to fellow retailers, offering its commerce services to help them sell online.

The company recently opened an apparel shop online, featuring dozens of brands through partnerships with retailers including Gap, Eddie Bauer, Foot Locker and Nordstrom.

Many of the stores included in that shop handle their own fulfillment and inventory issues, using Amazon merely as an entrance to their wares. Amazon's deal with CDNow is more similar to ones it has struck with Toys "R" Us, and, in which Amazon has more responsibility in running the online stores.