RTL Group Buys Bertelsmann Broadband Subsidiary

[London, ENGLAND] European media company RTL Group
announced Friday its purchase of Bertelsmann
Broadband Group for EUR 12.8 million (US $11.9 million).

Bertelsmann and RTL say they will continue to co-operate
closely — suggesting that the purchase is a convenience rather
than an old-style acquisition.

The unit, purchased from Bertelsmann eCommerce Group (BeCG),
will now form part of RTL NEWMEDIA, a subsidiary of RTL
Television in Cologne. It will continue to develop
broadband e-commerce applications while gaining access
to the interactive TV platform and customers of RTL Group
in Europe.

“Through this new arrangement, RTL Group and Bertelsmann
intend to gain a clear competitive advantage over other
providers of interactive broadband programming in Europe”,
said Ewald Walgenbach, chief operating officer of RTL Group.

Walgenbach went on to say that RTL Television is already
the market leader in Germany for interactive media solutions.
He also referred to the entertainment portal RTL World as
being “by far the most successful German general interest
Web site.”

The deal, said Walgenbach, would enable RTL to offer
cable network operators, and therefore cable customers, very
attractive and innovative media content in the future.

Klaus Eierhoff, head of DirectGroup Bertelsmann and a member
of the Board of Bertelsmann AG, said that by dividing tasks,
the companies could optimize their core B2C competences.

Established as a pilot project in April 1999 by the
multimedia division of Bertelsmann AG, the Broadband Group
has been testing its services in ten German cities.

Bertelsmann’s worldwide e-commerce activities are all
bundled into the Bertelsmann eCommerce Group. Businesses
that come under the BeCG umbrella are such well-known
subsidiaries, shareholdings and partnerships as BOL,
CDNow, Barnesandnoble.com and Napster.

The latest move is part of a general rationalization
process currently taking place in Europe’s e-commerce
industry. Earlier this week Kirch Holding GmbH agreed to
combine its Internet unit with that of ProsiebenSat.1
Media AG.

RTL Group, which last week announced the extension of
its European online advertising network, IP-Web.net,
into Hungary, has over 80 branded Web sites. It also
produces TV programs in 35 countries and has interests
in 23 television channels and 17 radio stations across
Europe.