Bertelsmann Takes Aim at eBay

Move over eBay, there’s a new kid on the block. German media titan Bertelsmann AG has staked a claim to the burgeoning online trading market with the launch of its own Internet auction site.

The new site, known as Andsold, will be operated through a partnership with its Gruner + Jahr and Bertelsmann Multimedia units. The move appears to some analysts to be a response to eBay Inc.’s June purchase of a German online trading company.

“Online auctions combine the advantages of the broad product assortments of small ads with the entertainment offered by flea markets,” said Klaus Eierhoff, Bertelsmann Multimedia’s chief executive officer.

Coming to America?

While declining to discuss specifics, Bertelsmann officials expect a costly marketing campaign. The company added that German commercial broadcaster RTL — which is owned by a company held by Bertelsmann — will soon join the venture. RTL is expected to expand the new auction site’s presence to countries around the world.

Challenging eBay

Bertelsmann announced that the site will sell everything from cut-rate airline tickets to signed baseballs, and will be a vehicle for both consumer-to- consumer and business-to-consumer transactions. Observers are bracing for quite a battle, as Bertelsmann’s $12 billion (US $) annual revenue should easily give it the jump-start it needs to compete with eBay’s well-established brand name.

Registration on Bertelsmann’s auction site is free for both buyers and sellers. If a contract is struck, Bertelsmann receives 3 percent of the revenue. To promote the site, the company said each new customer would be given an initial credit of 20 marks (DM).

About The Company

Bertelsmann is the world’s number three media company, behind only Time Warner and The Walt Disney Company. It has interests in 600 companies, including the Bertelsmann Music Group and publishing giant Random House. The company also has a stake in American Online, and owns a 41 percent interest in barnesandnoble.com.

Bertelsmann earned $620 million on revenue of $12.7 billion last year, and employs about 58,000 workers in 50 countries.

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