Sony and Time Warner make music deal; CDnow to be joined to Columbia House

Article Abstract:

Sony Corp. and Time Warner Inc. have announced plans to merge their jointly-owned Columbia House music club with CDnow, the online music store. The new company, not yet named, will focus on selling compact disks and video tapes from all music labels and movie studios, although it will emphasize the products of Sony and Time Warner. The new entity will be publicly traded in order to offer its employees stock options and use its stock as currency for future acquisitions. The current shareholders of CDnow will hold 26 percent of the new company. Sony and Time Warner will each get 37 percent. The deal comes on the heels of recent announcements by other media companies that they are forming publicly traded Internet businesses. CDnow has struggled to increase sales and make a profit. Its officials forecast revenue for the second quarter to be about $35 million, less than expectations and even less than its sales in the first quarter. After the announcement of the deal, CDnow's shares fell $1.9375 to $20.3125. Sony and Time Warner plan to promote CDnow over their existing Internet sites as well as on their sound recording covers and broadcast operations.

Japan, Telegraph & other communications, Video Retailing Service, All Other Information Services, Integrated Record Production/Distribution, Prerecorded records and tapes, Records & Tapes, Management, Company acquisition/merger, Online services, Internet services, Mass media industry, Time Warner Inc., Home shopping, Sony Corp., Sound recording industry, Recording industry, Sound recordings, SNE, Columbia House, CDNOW Inc.

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Amazon.com moving into drug and cosmetic retailing

Article Abstract:

Drugstore.com opens for business today, 2/25/99, with a 46% stake from Amazon.com in its success. Amazon will promote the drugstore retailer extensively and provide a link to the online store, but the two will not be able to cross-sell each others products. Drugstore.com also paid for promotional space on AOL, Yahoo and Excite.

Comment:

Bought a 46% stake in Drugstore.com

Drug stores and proprietary stores, Pharmacies and Drug Stores, Drug Stores, Retail industry, Retail trade, Abstract, Electronic commerce, E-commerce, Drugstores, Amazon.com Inc., AMZN, Drugstore.com Inc.

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