*Cendant To Divest Some Net Business, Outsource E-Commerce Services

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Membership direct marketer Cendant, New York, announced plans yesterday to boost the profitability of its Internet businesses by divesting companies that do not fit its business model and seeking strategic partnerships for the others. The company will also outsource its fulfillment and distribution services to e-commerce sites.


Cendant has hired ING Barings Furman Selz to manage the sale of RentNet, Match.com, and Bookstacks, Inc., which consists of the Web sites www.books.com, www.musicspot.com and goodmovies.com. The divestiture is part of the company's ongoing plan to raise capital for debt reduction and share repurchases. CEO Henry Silverman said its repurchase plans have been raised by $200 million to $1.2 billion.


Tim Klein, online analyst at Piper-Jaffray, said now is a good time to unload Net properties before the speculative bubble bursts but doubted the properties will fetch the dollars seen in Internet IPOs.


"The Internet is all about branding and I don't see [the sites] attracting a ton of value," said Klein, who expects the Bookstacks sites might be attractive to an e-commerce player looking to round out its product offerings or a second-tier portal looking to add commerce.


Silverman cited marginal profits as a factors in the decision to sell but Klein pointed out that a buyer won't be seeking profits but traffic and page views.


Cendant's membership-based Internet properties - NetMarket, Travelers Advantage, AutoVantage and PrivacyGuard - though unprofitable are considered an integral part of the overall company's membership business. Online members comprise just over 1 million out of 30 million total members but Cendant plans to grow that total through further investment and partnerships.


Cendant will leverage its massive fulfillment and distribution capabilities, including call center, software development and database management to provide outsourced services to e-commerce companies that do not directly compete with its membership business. As Silverman said in a prepared statement, "Our goal is to become an integral part of the merchandising and distribution backbone of e-commerce.''


The company also reported results with revenues up 29 percent in the fourth quarter ended Dec. 31 to $1.4 billion and net income up 65 percent to $190 million or $0.22 per share. For the year, revenues from continuing operations were up 25 percent to $5.3 billion with net income up 23 percent to $705 million or $0.80 per share. All results are reflected for certain charges and credits.
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