Bertelsmann will merge its online subsidiary Bertelsmann Online (BOL) and its book-club operations, in an effort to combat high losses in the Internet unit, according to European published reports.

BOL will in the future report to the book-club arm, hence losing its corporate independence, and its London headquarters will be shuttered.

Klaus Eierhoff, head of Bertelsmann Direct Group, told Handelsblatt that the decision was made to take account of consumer trends. The group hopes that the realignment of its online business will cause both BOL and the book clubs to become profitable in all global operations, as they are both currently operating at a loss.

Bertelsmann Direct Group, alongside the book club and online trading, also incorporates the group's music arm BMG.

Eierhoff described the merger of online and offline activities as a "multichannel strategy," which he and Bertelsmann Chief Thomas Middelhoff developed—although former vice president Al Gore also claims he had a hand in its invention.

According to London’s Financial Times, the Bertelsmann move is the company’s way of admitting defeat in its attempt to compete with Amazon.com.

The consolidation move also marks the end of Bertelsmann's plan for an initial public offering of BOL. All the group's Internet activities are being assessed for their usefulness to the group, as the market situation has made raising funds through IPOs much more difficult, the FT said.

Barnes&Noble.com, Bertelsmann's Internet bookseller in the U.S., where BOL does not operate, is not affected by the restructuring.