German media giant Bertelsmann AG announced Tuesday that it has sold nearly $700 million (US$) of its stake in America Online (NYSE: AOL). The move is at the center of a concerted effort to build up its multimedia unit.
According to reports, the Guetersloh, Germany-based company sold 7.2 million shares last Thursday to an undisclosed buyer. That represents about half of Bertelsmann’s stake in AOL. The company now holds 0.7 percent of the world’s largest Internet companies.
An original 5 percent stakeholder in AOL, the company has been selling off its shares since buying them in 1995. It owns AOL Europe with America Online, which itself made news Monday with the announcement of its new free Netscape Online service in the UK.
Building Its Online Presence
The $17 billion a year company has clearly set its sights on raising the Internet bar in Europe. Last week, it announced that the formation of an online auction site with German partner Gruner & Jahr. The site, called ANDSOLD, will challenge eBay in the relatively untapped European online auction market.
The company has also expanded its online bookstore in Europe in an effort to take on Amazon.com. Bertelsmann owns a 41 percent stake in barnesandnoble.com.
Additionally, Bertelsmann is pushing the online envelope for its music business. It recently announced that it is forming an alliance with Seagram Co., the world’s largest music company. The venture follows an April alliance between BMG — its music division — with Universal. The two companies will represent, among dozens of others, such world-renowned musical acts as U2, the Dave Matthews Band, Elton John and Whitney Houston.
In June, Bertelsmann invested $12 million in Tripod, the online community that it is taking on an extended expansion tour through Europe.
In months to come, analysts expect the company to sell off some of its online holdings as it develops a formidable Internet strategy. Reports say that Bertelsmann will sell its 74 percent stake in Pixelpark, a German corporate Web site developer and e-commerce service provider, when the company floats its shares in an IPO on Frankfurt’s stock exchange next month.
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