Bertelsmann Buys E-mail Marketer

Bertelsmann’s book and music club unit, DirectGroup, is poised to buy e-mail
marketer Zooba.com in a deal aimed at expanding its online promotional
efforts.

Financial terms were not disclosed.

Founded last July, New York-based DirectGroup Bertelsmann claims more
than 50 million customers and members for its book and music clubs, and its
e-commerce sales business. It’s generally considered the market leader in
media clubs and, with BOL, CDNow and a 50 percent stake in
BarnesandNoble.com, is a major force in media e-commerce.

But executives said the giant is seeking new ways to promote its book
club memberships and its publishing business. Enter Boston-based Zooba,
which claims 2.5 million members.

Each week, Zooba delivers some six million opt-in e-mails containing
personalized content based on users’ pre-selected topics. In the free
mailings, subscribers receive product recommendations from advertisers based
on those specified interests.

Additionally, Zooba.com also offers advertisers a custom e-mail channel,
through which subscribers can elect to receive news, announcements and deals
in e-mails from the advertiser.

Through Friday’s acquisition, DirectGroup Bertelsmann aims to leverage
those advertising vehicles for self-promotion.

“Zooba will allow Bookspan and other club businesses to precisely target
offers and information to member expectations and needs,” said DirectGroup’s
chief executive, Klaus Eierhoff. “For prospective club members, the service
works as a door opener: book-loving Zooba subscribers will discover the
clubs to be the perfect media service for their special fields of interest.”

DirectGroup also will provide Zooba.com services to Bookspan, a joint
venture between Bertelsmann and Time Inc. Bookspan, which includes more
than 40 book clubs (like Book-of-the-Month Club and The Doubleday Book Club)
will receive a 50 percent stake in Zooba.com through the deal, and access to
its e-mail marketing promotions.

“Until recently, publishers in particular have not had the most efficient
means to reach readers who are truly interested in their books,” said Zooba
president Jeffrey Glass. “We are proud and enthusiastic about the
acquisition … a wonderful event for our subscribers, investors,
[advertising] partners, and employees.”

Like partial owner DirectGroup, Bookspan plans to use Zooba to promote
its book club memberships to its more than 8.5 million reported members.

“We are very excited to join forces with Zooba.com because, unlike many
e-mail marketers and dot-com businesses, Zooba’s platform provides
compelling content and access to related services and products,” said
Bookspan chief executive Markus Wilhelm.

Executives at DirectGroup said the deal highlights the unit’s efforts to
beef up its online direct marketing efforts.

“We are in the process of advancing our clubs to become fully market- and
marketing-driven businesses,” Eierhoff said. “The acquisition of Zooba will
further fuel our determined efforts to fully integrate the Internet into our
club businesses.”

Zooba’s Glass said the acquisition should allow it to continue its
advertising relationships with other publishing partners. It currently has
deals with Viacom’s Simon & Schuster, Columbia University Press, St.
Martin’s Press and others.

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