Bertelsmann goes global via Web deal

Adding Telefonica, Terra Lycos client-base makes Teuton titanic

BERLIN — The $1 billion deal among German media group Bertelsmann, Spanish telco Telefonica and the newly merged search engine Terra Lycos has given the Teutonic giant an opportunity to further globalize its operations.

As part of the agreement following Telefonica’s $12.6 billion takeover of Lycos, Terra Lycos and Bertelsmann have agreed to establish a subsidiary of Bertelsmann’s Internet book and music shop BOL for the Spanish and Portuguese markets in Europe and Latin America.

Bertelsmann will hold a 75% share, Terra Lycos 25%. BOL already operates in 13 countries in Europe and Asia, and BOL shops will come online in Italy and Japan later this year. The Internet bookseller is slated for a public listing later this year.

Avenues for content

Bertelsmann is set to exploit the telecommunications and online prowess of its new partners by utilizing Telefonica’s and Terra-Lycos’ many avenues to promote and sell Bertelsmann properties like music, books, publications and radio and TV programs.

By tapping into Telefonica’s mobile phone clientele, numbering over 20 million in Europe, Latin America and North Africa, Bertelsmann is looking to greatly increase its e-commerce and download business as well as its advertising via cable and satellite networks, the Internet and wireless communication like WAP-equipped mobile phones.

Bertelsmann is also gaining direct access to some 50 million Terra Lycos customers, including those in lucrative Latin American markets.

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