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Bertelsmann taps Klein
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January 31, 2001: 11:50 a.m. ET
Former Justice Dept. chief to head up U.S. operations
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NEW YORK (www.thestandard.com) - German media giant Bertelsmann has asked former assistant attorney general Joel Klein to lead its U.S. operations.
It's an interesting choice, to say the least. Klein came to the Justice Department after a distinguished career as a private attorney and a stint as deputy counsel in the Clinton White House. But he will be remembered best for his decision in the spring of 1998 to file the landmark antitrust lawsuit against Microsoft (MSFT: Research, Estimates) that resulted in a court order to break up the company last year. 
The case is currently on appeal, and the government side is forced to soldier on without the talents of several key players, including Klein and his legendary hired gun, David Boies, who orchestrated the government's courtroom attack at Klein's request. But Klein keeps the credit for steering the case to a near-total government victory in federal district court.
Bertelsmann, meanwhile, faces challenges to its empire on several fronts, primarily from the distribution of content over the Internet and the formations of AOL Time Warner (AOL: Research, Estimates) and Vivendi Universal. (AOL is the parent company of CNN.)
The German company was initially slow to respond to online opportunities and threats, but it has since made great strides. Amazon.com started selling books and music online before Bertelsmann, but the German company now has a 41 percent stake in Barnesandnoble.com. It has also invested in a joint venture with Universal Music Group.
In early November, the company also made a surprising deal with the peer-to-peer music-distribution site Napster, announcing plans to launch a for-pay subscription-music service. Bertelsmann recently announced that it would launch a paid Napster service this summer.
Bertelsmann is also a backer of the online music site GetMusic. At the end of July 2000, BMG acquired the ailing CDnow for $117 million, in the hopes of linking its extensive music catalog to the site's potential for electronic commerce. The entertainment and media giant also launched Bol.com, an e-commerce media and entertainment site that serves Europe and Asia.
Klein, a consummate Washington insider, completes his journey through the classic revolving door of national politics. Though some had feared that Klein would not be aggressive in enforcing antitrust law, his division of the Justice Department raised its profile with the Microsoft case, and with the thwarting of the Sprint-WorldCom merger deal.
Klein resigned from his Justice Department post last September. In a statement issued then, he said "the time has come to seek new challenges."
He's got one, now. 
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