Global Online Services Alliance Formed by Bertelsmann, America Online, and Deutsche Telekom

Strategic Insights -

Bertelsmann AG and America Online, Inc. have announced a major international alliance with Deutsche Telekom, aimed at strengthening their presence in the global market for interactive services. The agreement, set to launch in Germany next month and in France and the United Kingdom in 1996, will see the companies swap equity positions in their respective European online ventures. This move marks a significant development in the online services market, with the three companies targeting different market segments in Europe.

Key Takeaways:

  • The alliance will involve a swap of equity positions in the European online ventures of the three companies, with Deutsche Telekom taking a minority stake in the Bertelsmann/America Online joint venture and AOL/AOL obtaining a minority stake in Deutsche Telekom's German-based T-Online.
  • The companies will focus on two distinct market segments in Europe: the home/consumer market through the AOL Online Service, and the professional and business markets through T-Online.
  • Axel Springer, a leading German publishing company, will take a minority stake in both T-Online and the German operations of the Bertelsmann/AOL joint venture.
  • The financial details of the alliance are not being disclosed due to pending regulatory approvals.
  • America Online is the largest and fastest-growing provider of online services in the world, with over 4 million subscribers and a global workforce of over 2,500 people.

Statistics:

  • Over 4 million subscribers to AOL's online services.
  • Global workforce of over 2,500 people.
  • 33 strategic alliances formed by AOL with companies such as Capital Cities/ABC, Viacom, Bertelsmann, Hachette, IBM, Compaq, and American Express.
  • 80% growth in AOL's revenue in 1995, making it the fastest-growing provider of online services in the world at the time.

Sources:

  • "PRNewswire" Release, November 21, 1995.
  • America Online, Inc., Press Release, 1995.
  • Bertelsmann AG, Press Release, 1995.
  • Deutsche Telekom, Press Release, 1995.