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To: RDR who wrote (13132)	9/28/1999 7:55:00 PM
From: snp	Respond to of 19700

Bertelsmann Prepares Net Floats The Industry Standard By Polly Sprenger After a months-long buying spree on the Web, German publisher Bertelsmann is getting ready to float some of its Internet investments on the public market. Among properties likely to be spun off are the joint venture Lycos (LCOS) Europe and the German portal site Fireball.de. Bertelsmann says Pixelpark, the company's multimedia and Web development arm, will definitely be spun off, its shares traded on Neue Markt, a tech-heavy exchange in Frankfurt, Germany. Bertelsmann released details of its Pixelpark float on Monday, but has declined to give specifics about Lycos Europe and Fireball, saying only that the two portals may merge to form a more valuable property. "We're considering ways of integrating Fireball into Lycos," says Frank Moss, a VP of Lycos Europe. "We would become by far the No. 1 portal in Germany in terms of users and page views." Lycos Europe and Fireball, which operates only in Germany, are both strong portals. Jupiter Communications reports that each has slightly less than half the traffic of lead competitor Yahoo (YHOO) Europe. Bertelsmann's investments in the two properties are already significant. The company owns 26 percent of Lycos Europe and 75 percent of Gruner – Jahr, the German publisher that owns Fireball outright. Noah Yasskin, an analyst with Jupiter, says the portal market in Europe is on the verge of increased consolidation because the number of companies in the space far exceeds what the market can support. Big international names will likely swallow up country-specific sites like Fireball. "Only the multinational portals are going to be in the game for very long," he says. Ralph Dreiver, a spokesman for Gruner – Jahr, acknowledges that Bertelsmann asked the company to come up with a plan for divesting itself of Fireball and incorporating the site into the Lycos Europe network of sites. Little progress has been made, but the company plans a float sometime in 2000. Bertelsmann spokesman Markus Payer says the combination of the two properties would serve to both enhance the value of Lycos Europe and localize the company's efforts to secure a commanding position in the European portal space. "The fact is that we have two search engines," Payer says. "We don't want to have to develop and internationalize two search engines [in] parallel." Bertelsmann also holds a 50 percent stake in AOL (AOL) Europe, one of three big Web names on the continent. The publishing giant recently sold off the bulk of its shares in America Online (AOL) itself, reducing its holding in the parent company from the 5 percent share it purchased in 1995 to 0.7 percent. Bertelsmann reportedly raised $691 million from the sale; the company said it would reinvest the proceeds in its Internet and multimedia holdings. Bertelsmann will raise a further $61 million by offering shares in its Pixelpark multimedia unit next week. The company will offer some 4 million shares for sale through Goldman Sachs and Deutsche Bank (DTBKY) . Pixelpark, a Web site and e-commerce developer, has sales of about $12.3 million annually. Bertelsmann itself is privately held. At a press conference in Germany last Wednesday, CEO Thomas Middelhoff said Bertelsmann would invest $1.2 billion in e-commerce and Web companies by the end of 2001. Between 1998 and 1999, the company invested more than double that amount in properties such as Lycos Europe, booksellers barnesandnoble.com and bol.com, and European auction site Andsold.com.