Sony Corporation and Bertelsman AG has broken up and Sony Corp. is getting custody of the offspring of their relationship. According to Yahoo Tech News, Sony bought out Bertelsman AG for 900 million dollars, effective October 1. This deal gives Sony the full rein on the operations of prominent recording company Sony BMG, which have unfortunately incurred some losses in the past years because of a decline in CD sales. Yahoo Tech News also reported that this move will allow Sony to "to harmonize its consumer electronics and its music, a duo that was badly out of sync". Bertelsman AG, meanwhile, will venture off to another direction, and will focus on its "growing TV, magazines and book publishing businesses."
This break off, I think, is a risky move for both companies, although there are obvious benefits. At a time of declining consumer spending, I do not know if a break up between two companies is really a smart move. As we have seen lately, the market has been trending more towards consolidation. However, this could also be a good move for Bertelsman AG and Sony Corp as it would allow both companies to operate independently and give them the free rein to specialize and improve their products.
ORIGINAL ARTICLE: http://tech.yahoo.com/news/ap/20081010/ap_on_hi_te/sony_bertelsmann
PHOTO SOURCE: http://www.24x7updates.com/newsimages/Sony_BMG_Recalls_Affected_CDs_Offers_Exchange.jpg
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