Bertelsmann mulls $1bn ad spend rethink

NEWS Media giant Bertelsmann is threatening to scale back $1bn in ad spend which had been earmarked for Terra Lycos's internet portal. The two companies forged a strategic relationship in May 2000 under the terms of which Bertelsmann agreed to spend $1bn over five years on advertising placement and integration services from Terra Lycos. But Bertelsmann is quoted in today's FT as saying: "One billion dollars is a lot, particularly since the price for advertising has decreased so dramatically. We will decide over the next months if and for which amount we will continue after October 2002. It will definitely be much less than the [expected] $675m." Most of the $325 spend planned for the period up to October has been spent. Terra Lycos relies on Bertelsmann for around one third of its core media revenues, according to the newspaper.