CDNow
 | |
| Fate | Acquired by Bertelsmann, shut down |
|---|---|
| Founded | February 1994 |
| Founder |
Jason Olim Matthew Olim |
| Headquarters | Ambler, Pennsylvania |
| Website |
www |
CDnow, Inc. operated an online shopping website that sold compact discs and music-related products. In April 1998, during the dot-com bubble, the company was valued at over $1 billion; however, it was acquired by Bertelsmann Music Group in July 2000 for $117 million and later shut down. At its peak, it employed over 750 people and had offices in Fort Washington, Pennsylvania, New York City, London, and Los Angeles.[1]
History
The company was founded in February 1994 by twin brothers Jason Olim and Matthew Olim in their parents' basement in Ambler, Pennsylvania.[2]
With 5 employees, the company moved near the Penllyn train station in Lower Gwynedd Township, Montgomery County, Pennsylvania and a couple years later it moved to the Strawbridge & Clothier building in Jenkintown, Pennsylvania.[1]
In 1997, the company had revenues of $17 million and in February 1998, the company became a public company via an initial public offering.[3]
On March 17, 1999, the company acquired N2K, which operated Music Boulevard.[4][5]
In July 1999, the company announced a merger with Columbia House.[6][7] However, in March 2000, the deal was called off.[8]
On March 20, 2000, as the dot-com bubble burst, Barron's published a cover article called "Burning Up", which noted that the company was running out of cash.[9]
In June 2000, the company closed its London office to cut costs.[10]
In July 2000, Bertelsmann Music Group acquired the company for $117 million, a price that was down over 90% from the valuation of the company at its peak in April 1998. The 2 Olin brothers got a total of $17 million.[11]
In April 2001, the company cut 40 employees, 10% of its staff.[12]
In August 2001, the company shut its Japanese website and laid off 200 employees.[13]
In November 2002, Amazon.com began operating the CDNow website.[14] The web site was later shut down.
References
- 1 2 Valania, Jonathan (February 27, 2002). "CD Then ... and Now". Philadelphia Weekly.
- ↑ Reyes, Juliana (July 31, 2012). "CDNow: 3 lessons from Fort Washington-based pioneering 1990s-era online music retailer". Technically Media.
- ↑ "CDnow goes public with a bang". CNET. February 10, 1998.
- ↑ "FORM 8-K". U.S. Securities and Exchange Commission. March 17, 1999.
- ↑ "CDNOW: NOW IS THE TIME". Wired. [{Reuters]]. March 18, 1999.
- ↑ GLASNER, JOANNA (July 13, 1999). "CDNOW, COLUMBIA HOUSE TO MERGE". Wired.
- ↑ "Columbia House merging with online retailer CDNow". Deseret News. Associated Press. July 13, 1999.
- ↑ Richtel, Matt (March 14, 2000). "CDNow Deal With Sony and Time Warner Is Called Off". The New York Times. (subscription required)
- ↑ Willoughby, Jack (March 20, 2000). "Burning Up". Barron's.
- ↑ "CDNow reportedly closes office". American City Business Journals. June 19, 2000.
- ↑ "Bertelsmann buys CDNow". CNNMoney. July 20, 2000.
- ↑ Miles, Stephanie (April 18, 2001). "Web Seller CDnow Cuts More Staff Amid Integration With Music Club". The Wall Street Journal.
- ↑ "CDNow staff to dip at Fort Washington". The Times Herald (Norristown, Pennsylvania). August 31, 2001.
- ↑ Hansell, Saul (November 26, 2002). "Bertelsmann to Let Amazon.com Run CDNow". The New York Times.
Further reading
The CDnow Story: Rags to Riches on the Internet by Jason Olim and Matthew Olim