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Bertelsmann Strengthens Random House’s Role in Book Club Operations

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MAIN NEWS HEADLINES
September 6 – September 13, 2007 Edition

Bertelsmann Strengthens
Random House’s Role
in Book Club Operations

Gütersloh/9/3/07–The international media company Bertelsmann is charting the course for a reorganization of its direct-to-customer businesses, united in its Direct Group division. In his new capacity as CEO of Direct Group, Fernando Carro will supervise the division’s European and Asian operations, and report directly to Bertelsmann’s Chairman & CEO. As a member of the divisional executive board, Carro has held several executive positions at Direct Group, in particular as managing director of the Spanish and the German clubs.

There are good growth opportunities for Direct Group, especially in eastern Europe and Asia. Its new structure will allow for an even closer strategic interlinking of club, bookselling and Internet activities.

The book, DVD and music club business Bertelsmann Direct North America (formerly: Direct Group North America), managed by Stuart Goldfarb, President and CEO, will now report to Bertelsmann Executive Board member Peter Olson, Chairman and CEO of Random House. In the U.S., its acquisition of Columbia House established Direct Group as the country’s leading direct marketer of music and DVDs. Recently, Bookspan, the US book club company, was integrated into the group. This combines Random House North America and Bertelsmann Direct North America into a strong alliance within Random House. This alliance will spark new growth throughout the group.

The Bertelsmann AG Executive and Supervisory Boards agreed to the reorganization, effective immediately, after Direct Group CEO Ewald Walgenbach had announced his intention to resign from the Bertelsmann Executive Board and from Direct Group. Walgenbach will actively facilitate the reorganization until his departure.

Bertelsmann AG`s Chairman & CEO Gunter Thielen said: “I would like to thank Ewald Walgenbach for his outstanding entrepreneurial achievements at Direct Group over the past few years. The U.S. business was strengthened considerably, and turnaround processes in major European markets were systematically pursued. On the basis of what has been achieved to date, we are confident about the successful continued development of our international club ventures. These operations will continue to be a core business at Bertelsmann. I am very pleased to have Fernando Carro und Stuart Goldfarb, two experienced Bertelsmann executives, in these two key positions.”

The new Direct Group operates media clubs and bookstores in 23 countries. It has a comprehensive network of outlets comprising over 800 club centers and book retailers. The clubs possess well-known, historic brands such as Der Club in Germany, France Loisirs in France, and Circulo de Lectores in Spain. Many clubs have earned a reputation as cultural institutions in their respective countries.

Bertelsmann Direct North America is the largest direct marketer of music, DVDs and books in the U.S. and is home to such well-known brands as BMG Music Service, Columbia House, Doubleday Book Club, Book-of-the-Month Club, Mystery Guild and Black Expressions as well as a number of special interest and lifestyle book clubs. They serve millions of members in the U.S. and Canada through their various club catalogs and online.