Bertelsmann shedding online units

The German giant says it is selling online book retailer Bol.com in parts of Europe and will focus instead on its book and music media club businesses.

Jim Hu Staff Writer, CNET News.com
Jim Hu
covers home broadband services and the Net's portal giants.
Jim Hu
2 min read
German media giant Bertelsmann on Tuesday said it plans to sell its European online retail ventures and will focus instead on its book and music media club businesses.

The changes affect Amazon.com rival Bol.com, a Bertelsmann unit that sells books, CDs, DVDs, gifts and software. Bertelsmann is trying to sell its Bol divisions in Germany, Switzerland, the Netherlands and Sweden to another competitor. Bertelsmann will hold on to its joint ventures in Italy and China because Bol is already folded into their respective book club businesses.

The company has initiated contact with competitors but has not begun negotiations for an outright sale of the sites, said Bertelsmann spokesman Gerd Koslowski.

"We are no longer investing in pure e-commerce," Koslowski said. "It's a strategic decision to withdraw from a complete e-commerce model in Europe. If we don't find a buyer we will try to find a management buyout or transfer this into a club business."

Bertelsmann's U.S. e-commerce businesses--such as the BeMusic division, which includes CD retailer CDNow, its BMG MusicService music club, and its 36 percent stake in Barnes&Noble.com--will not be affected by the reorganization.

Instead of extending itself into online retail, Bertelsmann will throw more weight behind its European book and music club businesses. Bertelsmann pioneered the Book of the Month Club, opening the door to mail-order book purchases.

The move comes as published reports say Bertelsmann is in discussions to sell Bol to Amazon and is stepping back from its investment in file-sharing service Napster. In July, the company's board of directors ousted former Chief Executive Thomas Middelhoff, who was instrumental in launching Bol.com and in making the Napster investment.

Bertelsmann's moves highlight the trend among some big media conglomerates to step back from their Internet operations. Last week, Vivendi Universal sold its 50 percent stake in wireless Web portal Vizzavi in an effort to reduce its debt load. And AOL Time Warner has swept out the AOL veterans that once occupied its top executive ranks, including former CEO Gerald Levin and former Chief Operating Officer Robert Pittman.

Although Bertelsmann is clearly distancing itself from the Internet, Koslowski said the company would be "stupid" to abandon the Web as a marketing and distribution medium.