Bertelsmann Overestimated Possibilities of E-Commerce

Thomas Middelhoff, head of the Bertelsmann management board, has admitted
that he overestimated e-commerce growth.

It was also a mistake to push for BMGs leap to a worldwide leading position, Middelhoff said in the Saturday
edition of the “Neue Westfdlische” newspaper in Bielefeld. Although the
merger with EMI failed, no one wanted to withdraw the plans for expansion.

Nonetheless, the Bertelsmann group will post record-breaking earnings for
fiscal year 2000/2001, which ends on June 30. Earnings before interest,
taxes and depreciation amounted to seven billion German marks.

Despite the difficult market environment, operational earnings, for Gruner +
Jahr, for instance, remained steady at the previous year’s level of 2.3
billion marks. The financial situation of the group is good; the company is
nearly free of debts.

Middelhoff says that earnings in the year 2002 will be
doubled to seven billion euro.

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