Bertelsmann chief backs AOL/ Time Warner merger

NEWS German media giant, Bertelsmann, has formally welcomed the proposed merger between AOL and Time Warner, calling it a vindication of its own strategy of integrating the Internet with traditional media. However, the $350bn mega merger calls into question the value of Bertelsmann's partnership with AOL, with AOL Europe being a 50-50 joint venture between the two companies. Bertelsmann stated the move is "a confirmation of its own strategy and an entrepreneurial challenge". Bertelsmann confirmed it will continue its partnerships with AOL in Europe and Australia. Bertelsmann CEO, Thomas Middelhoff, is on AOL's board and gave his approval to the Time Warner merger. Dr Henning Dransfeld, a consultant from Ovum said the merger causes potential problems for Bertelsmann as there are a number of areas where it is in direct competition with Time Warner, notably in cable television provision. "Bertelsmann may now have to compete with AOL in the US - risking ending their relationship. This does force Bertelsmann to reassess," he said. For more information see 'AOL and Time Warner in $350bn mega merger' (http://www.silicon.com/a34982 ).