Bertelsmann Scoops Up E-Mail Marketer

DirectGroup Bertelsmann, parent company of CDNow and majority owner of Barnesandnoble.com, said Friday that it will buy e-mail marketing and e-commerce firm Zooba.com.

DirectGroup, the corporate division that integrates Bertelsmann's direct-to-customer businesses, said that it plans to transfer half ownership of Zooba to Bookspan, the book club marketer it recently formed in partnership with Time, Inc.

Klaus Eierhoff, chief executive officer of DirectGroup, said that Zooba's e-mail service will work as "a door opener" for prospective book club members and potential customers of other Bertelsmann online businesses.

"The acquisition of Zooba will further fuel our determined efforts to fully integrate the Internet into our club businesses," Eierhoff said.

Zooba president Jeffrey Glass added that online companies and "publishers in particular have not had the most efficient means to reach readers who are truly interested in their books."

Who's Zooba Who?

Zooba uses e-mails containing targeted content as a vehicle for e-commerce sales. Each e-mail contains a brief article and highlights several products closely related to the subject matter.

The firm's e-commerce partners include Amazon.com and Barnesandnoble.com, as well as several trade and university publishers.

Terms of the deal were not disclosed. Privately held Zooba is based in Boston, Massachusetts, and has 2.5 million members responsible for receiving 6 million e-mails annually.

Zooba also licenses its content to e-commerce firms as a custom marketing program, in addition to its general e-mail service.

Following Trend

Bertelsmann's purchase of Zooba underscores what analysts say will be the increasing use of e-mail as an advertising and marketing channel in coming years.

Jupiter Media Metrix recently reported that US$1.3 billion will be spent this year alone to send 43 billion commercial e-mail messages to customers and potential customers.

Separately, the Yankee Group has reported that a majority of online marketing officials believe that, in coming years, e-mail will become a more important vehicle for marketing than banner advertising.

Bertelsmann Builds

An early investor in America Online, Bertelsmann has become a major and aggressive player in the e-commerce field. In July, Bertelsmann rescued struggling CDNow, buying the music e-tailer for $117 million.

In November, Bertelsmann sparked controversy by linking with file-swapping service Napster, which is expected to roll out a paid version of its free service this summer and will also be linked to CDNow.