Bertelsmann is merging the administration of its online bookstore, Bol.com, with its book club and direct-to-consumer division, DirectGroup. Under the plan, Bol.com stores in China, Finland, Germany, Japan, the Netherlands, Sweden and the U.K. will be fully integrated into local book clubs. Bol.com's store in Switzerland will be managed by Bol.com in Germany, and the Bol.com sites for Denmark and Norway will be closed. The Italian site will be integrated into that of Mondolibri. The company said that it is still in "talks" with its French partner, Havas, as to the fate of the French site.
Bol.com opened in early 1999 and, with Bertelsmann's deep pockets, the company quickly opened 16 online stores in countries throughout Europe and Asia. Bol.com is now Europe's number two in media e-commerce after Amazon.com, with some $85 million in revenues projected for the current business year. An IPO was expected in May 2000, but a steep decline in the capital markets forced the company to cancel the launch; last week's announcement prevents the possibility of going public altogether, as it eliminates Bol.com as a separate corporate entity. Bertelsmann did not disclose how many of its 300 worldwide employees are expected to lose their jobs, though it did indicate it would eliminate positions of overlapping responsibility.
In completing its development into what DirectGroup CEO Klaus Eierhoff calls a multichannel provider, the group will also make use of U.S.-style special offers, innovative marketing tools and modern technologies such as file sharing. Frank Sarfeld, senior v-p and corporate communications officer for Bertelsmann eCommerce Group told PW the point of the merger is to respond to contemporary buying behavior, which tends to make use of all channels that exist. "It really is a market channel strategy," he said. "Bol has always concentrated on media products, and this integration is designed to help our customers who already buy from us."
For example, club customers will be able to order from the entire range of books available on the open market, while Bol.com users can be tempted by special prices offered in the clubs. In Germany, customers will also be able to shop at Bertelsmann's retail book club stores. Sarfeld said a similar integration is taking place among Bertelsmann's music divisions, to be called BeMusic, which will incorporate music club BMB, online store CDNow.com and the file-sharing site Napster.
