Amazon expands again
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Columbia House Buys CDNow

Surprises

from the no-wonder-they've-been-so-quiet dept

Tue, Jul 13th 1999 11:05am — Mike Masnick
Well, this one was a shocker. Columbia House and CDNow have agreed to merge. I haven't had much time to think about it, but my initial thoughts are negative. I'm not sure there are that many synergies, and even if there are, I'm not sure that combining the two companies will bring them out. I'd like to see what happens, but it might just be a desparation play by both sides. CDNow is losing the war to Amazon, and Columbia House is losing the war to the internet in general.
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  • identicon
    prash, 13 Jul 1999 @ 12:54pm

    Direct Marketing and Internet Savvy

    While I agree with Mike that this deal reeks of desperation, there are some pretty solid fits here. Columbia House has really missed the boat on the Internet. They could have been huge, but they lacked net savvyness. CDNow has been crushed by Amazon, but has a solid web site. Combine CDnow's net expertise with Columbia House's direct marketing savvyness and you could have a real powerhouse.

    The fact that both Sony and Time Warner are involved also hints at a bigger opportunity down the line, music downloads. CDNow/Columbia House is well positioned to have exclusive rights to an extensive library of music downloads. CDNow just started offfering downloadable music files in the Windows Media format

    [ link to this | view in chronology ]


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