German media giant Bertelsmann AG has begun crafting plans to develop an entertainment-driven social networking website to compete with MySpace and other similar services, a source familiar with the discussions has revealed.
The news comes less than one week after Bertelsmann agreed to sell video content to the popular internet video site YouTube, which has a social networking component and which was acquired days later by Google.
With the new site, Bertelsmann aims to create a community for its music and video projects, according to the source.
The company plans to meet with its RTL television and Sony BMG music divisions to discuss the service, the source said. Bertelsmann declined to comment.
MySpace, which is owned by News Corp, is one of several social networking sites, including Facebook.com and Live Spaces, that offer a web experience encouraging two-way participation. They go beyond static places where people search for news and information to offer forums that allow users to share opinions, stories, photos and videos.
A move by Bertelsmann to launch a social networking website would represent yet another curve in the company's winding – and at times unwinding – internet strategy.
During the internet bubble phase, under former chief executive officer Thomas Middelhoff, the media giant acquired a stake in the former AOL, which had merged with Time Warner, and made an investment in the peer-to-peer music exchange Napster, in addition to launching numerous e-commerce services of its own.
But when the bubble burst, Middelhoff was fired and the company began to retrench, selling its stake in AOL and folding many of its internet businesses and projects.