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To: H James Morris who wrote (77997)	9/22/1999 4:27:00 PM
From: Glenn D. Rudolph	Respond to of 164684

FOCUS-Bertelsmann 13pct sales gain led by US growth (Writes through with details from news conference, quotes from CEO) By Deborah Cole and Paul Carrel GUETERSLOH, Germany, Sept 22 (Reuters) - German media giant Bertelsmann AG<BTGGga.DE> said on Wednesday that the United States has become its biggest national revenue generator, driven in large part by robust expansion in its online business. The group, which is Europe's largest media concern in terms of sales and privately owned, said that its U.S. operations generated nine billion marks ($4.8 billion) in revenues in 1998/99, an increase of two billion marks from the previous year. "The United States has become Bertelsmann's strongest market," Bertelsmann Chief Executive Thomas Middelhoff said at the group's annual results news conference, adding that its U.S. sales had nearly tripled in the last decade. The year saw Bertelsmann become the world's largest publisher of English-language books when it acquired U.S.-based Random House. It also took a 40 percent stake in Internet bookseller Barnesandnoble.com, which floated earlier this year. It also owns the New York-based BMG music group whose stars include Whitney Houston and the Backstreet Boys. INTERNATIONAL EXPANSION AND INTERNET MILLENNIUM GOALS The company, which started in the 19th century as a publisher of hymnals, has made international expansion and the integration of the Internet into its core business its goals for the next millennium. It said the U.S. market was central to that drive. "In the long run, the potential in the United States is very strong," Chief Financial Officer Siegfried Luther told reporters. The group's acquisition strategy is based on establishing a market-leading presence in its traditional publishing and music business as well as the rapidly expanding Internet industry, where it still trails the market leaders -- Internet service provider America Online <AOL.N> and online book retailer Amazon.com <AMZN.O>. "At this point, we are more worried about Internet start-ups than we are about mega-mergers," Middelhoff said in reference to last week's tie-up between U.S. television network CBS <CBS.N> and cable television group Viacom <VIA.N>. 1999/2000 REVENUES TO BREACH 30 BILLION MARKS The group posted a 13 percent rise in group consolidated revenues for the 1998/99 fiscal year to 26 billion marks from 22.9 billion in the year-ago period and raised net profit 2.6 percent to 910 million marks ($489 million). Total revenues, including its 50 percent stake in European television group CLT-Ufa, reached 29.0 billion marks, up from 25.7 billion marks. Middelhoff forecast 1999/2000 revenues above 30 billion marks. The group reported 7.3 billion marks in sales last year in Germany, which had traditionally been its largest market, a rise of 287 million marks and representing a 28.1 percent share of group revenues. Bertelsmann said it had tallied 9.7 billion marks in turnover in the remainder of its international markets together or a 37.2 percent share of sales. The United States, Germany and the remainder of Europe had each claimed about a third of revenues in 1997-98. Multimedia -- including its electronic commerce, Internet services and networking activities -- was the group's smallest but fastest growing division last year, expanding at a rate of 53.4 percent to 480 million marks in consolidated revenues. Middelhoff said the group would post 1.9 billion marks in cumulative losses by the end of fiscal year 2001/02 in its multimedia business and forecast consolidated multimedia sales to increase to 1.2 billion marks during the same period. Bertelsmann said that the rise in revenues was mainly due to an increase in the revenue stream from acquisitions. Luther said that group investment had increased three-fold last year to 4.73 billion marks, primarily due to the Random House and Barnesandnoble.com acquisitions and its purc...