Bertelsmann Restructures
September 4, 2002
More than a month after letting go of freewheeling CEO Thomas Middelhoff, German media giant Bertelsmann is well on its way through a substantial consolidation.
On Tuesday, Bertelsmann posted operating profits in the first half of 2002 of 157 million euro ($156 million). The figure was a vast improvement over the first half of 2001, when Bertelsmann posted losses of more than 800 million euro ($793 million).
The figures, announced by new CEO Gunter Thielen, are encouraging even if they are more attributable to Middelhoff than the new regime.
Like Middelhoff, Thielen said Bertelsmann was going to focus on the tradional media that brought the 167-year-old concern to where it is today. The concern's successful television wing, which includes Germany's RTL channel, will play a large role in trimming Bertelsmann's losses.
As part of the consolidation, Bertelsmann is casting off money-losing online retailers for which Middelhoff had great hopes. The company said this week it is looking for buyers for Bol.com, an online book retailer. Bol.com is part of the DirectGroup wing of Bertelsmann, which lost 119 million euro in the first half of 2002.
The concern is also likely to get rid of Napster.com, the Internet music trading site in which it has invested 100 million euro ($99 million).
But Thielen was quick to say the sales did not mean Bertelsmann was getting out of the Internet business altogether.
"We don't see the Internet as a separate business, but as a part of our core business," he said at a press conference.
Thielen is also restructuring the top level of Bertelsmann management and decentralizing a firm that Middelhoff labored to develop into an integrated corporation. With the elimination of some positions, and the shifting of others, Thielen has already cut 76 jobs.