SAN FRANCISCO (02/10/2000) - Andreas Schmidt has a new mantra: "No comment."
For the past three weeks, AOL Europe's CEO has faced a daily barrage of press rumors alleging his company is about to be split down the middle. AOL Europe is currently a 50-50 joint venture between Germany's Bertelsmann and the U.S.'s America Online. Bertelsmann's stake appears to be up for grabs, as the German media giant doesn't want to find itself in close association with AOL's newly acquired Time Warner.
Bertelsmann has said it's talking to everyone. Press reports across Europe have linked AOL Europe with a number of companies, from France's Vivendi to Germany's Mannesmann. Most recently, AOL Europe has been linked with America Online itself. The latest reports from Germany suggest the American Internet company will buy Bertelsmann's shares, assuming total control of AOL Europe.
But Schmidt, a Bertelsmann alumnus, is putting a brave face on the situation.
"There have been plenty of rumors in the past. We have seen rumors come and go.
We have never commented on them, and we never will," he says. "We are the most attractive and aggressive player right now. I don't care about the speculation, and neither [do] the management or employees."
While Schmidt attempts to put out the flames, other big players are stoking the fire. Vivendi made noises about purchasing the Bertelsmann stake several weeks ago, and Time Warner's Gerald Levin hinted at a buyout in a recent Financial Times article, saying AOL Europe was a joint venture only "for the time being."
The London Guardian said last week that the company's stake in AOL Europe could be worth up to $7 billion.
Vivendi spokesman Antoine LeFort says his company already has a controlling stake in AOL France, but wants to get its arms around a more significant part of AOL's European presence. Now that Vivendi has teamed up with mobile phone operator Vodafone in an online joint venture, the time seems ripe. "We think that AOL Europe would be very well integrated into this partnership," LeFort said.
Bertelsmann, for its part, is grateful for the attention but has declined to comment on what it regards as "rumor and speculation." Company spokesman Markus Payer confirms that Bertelsmann has been in talks with a number of companies, but what was discussed will remain secret. "We constantly repeat that our partnership is stable and will be further developed," Payer says.
But European market watchers are quick to note that while Bertelsmann and AOL are not confirming that the joint venture will be dissolved, neither are they bothering to deny it. Instead, both companies are concentrating on rebuilding themselves, not only as participants in the Internet revolution, but also as drivers of the mobile phone revolution now percolating in Europe.
"Today we have around 40 million online consumers, at the same time we have round about 100 million users of mobile phones," Schmidt says. "It makes a lot of sense to combine these two worlds."
Linkups between mobile phone operators and Internet companies are Europe's "flavor of the month." In addition to a Vivendi-Vodafone joint venture announced last week, AOL Europe joined hands with Nokia and Ericsson last Monday to build a portal for customers using wireless application protocol, or WAP, technology.
AOL Europe has made the somewhat-unusual move of teaming up with mobile phone manufacturers, rather than phone operators, to try to force operators to keep standards open. "We believe you have to start with an open platform," Schmidt says. "This is an open platform everybody can access, very similar to portals you see on the Internet."