New Strategic Priorities: Focus on Club Businesses Involvement with BOL in Germany, Switzerland, the Netherlands and Sweden will be phased out

GUETERSLOH (Germany 3. 9. 2002 ots/PROTEXT) - As part of itsstrategic reprioritization, DirectGroup Bertelsmann will focusexclusively on successfully steering its worldwide media clubbusinesses. The group will withdraw from stand alone eCommercemedia businesses in Europe. A variety of possible withdrawalscenarios are being looked into for the BOL businesses inGermany / Switzerland and the Netherlands and for the Bokusholdings in Sweden (formerly: BOL) with their roughly 140employees. DirectGroup is holding on to its BOL joint venture inItaly and to its Chinese operations. Both BOL businesses arealready fully integrated into the respective local clubs. Thesupervisory board has received a proposed resolution from theexecutive board regarding this subject.

Businesses not affected by the current changes include theU.S. based BeMusic, where the e-commerce activities of CDNOW arefully integrated with the BMG MusicService music club, and the36.2 percent share holding in barnesandnoble.com.

The international BOL ventures currently account for lessthan four percent of DirectGroup's total turnover. After itsdovetailing with local club operations, synergetic effectsoverall lagged behind expectations. BOL is growing, but being astart-up venture it is not yet profitable. As a retailenterprise BOL will not be able to meet Bertelsmann's returntargets in the coming years.

Says Ewald Walgenbach, DirectGroup CEO: "The teams headed byArndt Roller in Germany and Switzerland, Daniel Ropers in theNetherlands, and Anders Ringnér in Sweden and theirpredecessors have done first-class entrepreneurial pioneer workin the past few years and deserve our acknowledgement. BOL is nowEurope's undisputed No. 2 in media product e-commerce, and is infact the market leader in the Netherlands. We are parting fromBOL because of new strategic priorities within DirectGroup. Wehave set ourselves the goal of resolutely leading the divisionas a whole to profitability in its core markets and businesses,based on proven business models. Our management is devoting itsenergy to the turnaround of several club companies that arestill operating at a loss, as well as to the ongoing improvementof our operative business. Profitable club ventures like inFrance, Spain or the US that managed to significantly improveresults within the last year do prove the viability of themembership-based business model."

The Internet, an integral part of the company's clubbusinesses, remains an important field of growth and innovation.The Web is now used for new member recruitment, customerretention, and as an additional marketing and sales channel.Today, club members order on all the various channels, i.e.catalogs, shops, phone and the Internet. 108 of our worldwideclubs now offer their members online-shops. Several clubsrecruit up to 40 percent of their new members on the Web. Therevenue share generated on the Internet lies between 4 and 25percent depending on the club. In fiscal year 2000 / 01, theclubs generated some Euro75m in revenues on the Internet.Advertising and distribution costs are particularly low on theInternet an DirectGroup's goal is to expand its Internetservices to customers in the club businesses.

About DirectGroup

DirectGroup Bertelsmann integrates Bertelsmann's globalmedia direct-to- customer businesses. Roughly 55 millioncustomer-relationships and approx. 25 million Unique Visitorsper month secure DirectGroup's position among the largestenterprises in media commerce. Cornerstone of this success arethe Book Clubs with its 28 Mio. members in 19 countriesincorporating strong brands like France Loisirs, Book-of-the-Month-Club, Der Club or Circulo de Lectores. Members have accessto the Clubs' product range via catalogue, internet or one of the600 worldwide club shops. Add to this BeMusic the US musicdistributor constituted of the BMG MusicService club and theInternet shop CDNOW. A 36,2 percent stake in renowned onlineretailer barnesandnoble.com is also part of DirectGroup.

About BOL

BOL is DirectGroup's international online media andentertainment shop. Launched in 1999 it currently operates in 6countries (China, Germany, The Netherlands, Switzerland, Swedenand Italy). A single BOL media shop offers up to 900,000 books,300,000 music-cds and a wide variety of videos, DVDs andcomputer games. With its 2,5 million customers it will generatedrevenues of nearly Euro 100 million in fiscal year 2000/01.

ots Original Text Service: DirectGroup Bertelsmann Internet:http://www.presseportal.de

Enquiries:

Gerd Koslowski, DirectGroup Bertelsmann, Head CorporateCommunications Tel.: +49 5241- 80 -41 555,gerd.koslowski@bertelsmann.de

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