Without the merger, CDNow would have run out of cash in September, it said. Now the company will become a wholly owned subsidiary of Bertelsmann. It will remain headquartered in Ft. Only two years ago, things looked very different. In a sense, it's not so much a question of what went wrong as what did not go right.
Most online businesses are unprofitable.
CDNow has struggled to raise money to keep going until it could get in the black, finally searching in vain for a White Knight to rescue it. But an attempt to merge with Columbia House, the big music seller owned by Sony and Time Warner, fell apart in March. Many online businesses interpret rising numbers of site visits as a positive sign, even though only a tiny fraction of visitors make purchases. This focus is deceptive, Fader says. Any new business, online or off, experiences a honeymoon when visitors come out of curiosity.