Bertelsmann Profit Jumps

AP Online
09-13-2000
Bertelsmann Profit Jumps

BERLIN (AP) -- German media titan Bertelsmann reported Wednesday that annual profit jumped 45 percent after it merged its radio and television business with a rival and sold off other units to focus on becoming the world's largest supplier of Internet content.

Europe's largest broadcaster earned $589 million in the twelve months through June compared to $406 million the year before, while revenue increased 25 percent to $14.3 billion from $11.6 billion. Both figures were lifted by the full inclusion of results from the radio and TV unit from January on.

Bertelsmann, which is selling off stakes in Internet service providers such as America Online, merged its TV and radio arm with Britain's media group Pearson in April to form a new group with more than 22 television channels in 35 countries.

``We're investing massively in content and at the same time bringing more of our existing business onto the Internet,'' Bertelsmann chief executive Thomas Middelhoff said.

Bertelsmann plans to invest $3.1 billion in the next three years in its online business -- which includes search engine Fireball and online book retailer BOL -- in a bid to beat rivals such as Time Warner and Disney to become the largest supplier of media content via the Internet.

After allying with AOL and rival Internet access provider TerraLycos to help its products reach more customers, Bertelsmann said it has about $13 billion to spend on acquisitions, though it didn't name any targets.

The company also said it will set up a venture capital fund, to be called eBertelsmann, with $1 billion to invest in new technologies to ease the distribution of media content.

Bertelsmann's holdings include the book publisher Random House, the music company BMG Entertainment, CDNow and 40 percent of barnesandnoble.com.

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