CDNow, which has a presence in Silicon Alley resulting from its 1998 merger with music pioneer N2K, has been a wallflower of sorts lately. The online fee-based music company had to absorb the shock of a deal gone sour with Time Warner and Sony and has since been courting buyers. The company was also embroiled in lawsuits over breach of contract allegations between itself and Lycos and Citysearch-Ticketmaster. Now, Bertelsmann has stepped in and saved the cash-crunched company. But the deal has ushered in some new concerns.
Most suitors find explanations or their actions are explanation enough.
Bertelsmann formed an alliance with America Online early this year and began expanding its content distribution through AOL's platform. The two arrangements ensured Bertelsmann access to about 240 million customers. This merger is no different. It's a new star on a map that locates traffic and sifts content and commerce. CDNow is a well-known and trafficked brand and its hope chest is filled with about 4 million customers and an average daily audience it said tops 700,000 users.