Columbia House, New York, a direct marketer of music and videos co-owned by Sony Corp. and Time Warner, merged with CDNow, Fort Washington, Pa., an online music and video retailer. The new company resulting from the merger will be owned 37% each by Sony and Time Warner; CDNow shareholders will hold the remaining 26%. Sony and Time Warner will position the company as central to their e-commerce efforts; CDNow
will be able to tap Sony and Time Warner's cross-promotional resources as a result of the merger. Sony and Time Warner's music-related Web sites will be linked to the new company's online retail site, and the two companies will enable the new service to buy advertising across their media properties. The companies are now searching for a CEO to head the new company, as yet unnamed.
Copyright July 1999, Crain Communications Inc.