Article 33 of 200
Technology
Bertelsmann Starts Online Bookstore
By Kimberley A. Strassel
02/05/99
The Wall Street Journal Europe
Page 4
(Copyright (c) 1999, Dow Jones & Company, Inc.)
Jumping into the electronic-commerce realm, media giant Bertelsmann AG
unveiled its Books Online stores in France and Germany, and announced
plans to roll out in three other countries in the coming months.
The launch, which has been expected for several months, marks
Bertelsmann's biggest push yet into Internet commerce. BOL stores will
offer 4.5 million titles for buyers to browse, local-language sites and service
and shipment services across Europe. BOL, which plans an aggressive
marketing campaign, hopes later to add music and videos to the sites.
The arrival is likely to put enormous pressure on Europe's still-young group
of Internet book and music sellers, which include Amazon .com, Germany's
buecher.de and the U.K.'s Internet Bookshop. Europe's e-commerce market
is set to top more than 10 billion marks ($5.78 billion) by 2001, with an
estimated 35% of that revenue coming from books and music. Bertelsmann is
betting on its pan-European presence, links with prominent European players
and background in the book and music industry to help it capture a large
portion of that revenue.
Still, some analysts have criticized Bertelsmann for its late arrival on the
European e-commerce scene. Rival U.S. bookseller Amazon .com launched
services in the U.K. and Germany in October, while locals have been busy
selling goods for several years. Bertelsmann will also be at a disadvantage to
those companies that already sell compact disks and movies on their sites.
Bertelsmann is counting on its size to help it make up for lost time. The
company has spent the past nine months setting up operations and rooting out
partners in five European markets, which will give it a much larger presence
in Europe than any of its rivals. Linkups with local favorites, such as content
company Havas SA in France, will help BOL maintain visibility in local
markets as well as widen its local-language materials.
BOL has also been busy signing deals with leading portal companies and
online service companies in Europe, hoping these ties will drive traffic to its
book sites. Many of the companies it has linked up with are already part of
Bertelsmann's growing multimedia empire, including Lycos Bertelsmann
GmbH, a joint venture between Bertelsmann and Lycos Inc., and AOL
Europe, a partnership between Bertelsmann and America Online Inc.
Heinz Wermelinger, head of BOL, says the company's next step will be to
link with local favorites in each market. In addition to the German and
French sites that just opened, BOL plans to open a U.K. site at the beginning
of March, a Dutch service in April and a Spanish site sometime after the
summer holidays. The company also is looking at Italy, but has made no
decision yet. "We want to be in as many markets as possible, but we'll only
go in when we know we can offer good local-language service and
local-language products," Mr. Wermelinger said.
In many European countries -- Germany, Austria and France, for example --
book prices are fixed and discounts are illegal, so online sellers can't
compete on price as they do in the U.S. Other countries restrict the number
of foreign-published books that can be sold in their markets.
European online booksellers therefore must depend on customer-friendly
services such as next-day delivery, gift certificates and local-language help
desks. Mr. Wermelinger says BOL will feature book reviews, information
about authors and chat groups, as well as offering visitors the ability to
customize their visits and find information on topics that interest them most.
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