Amazon to put its spin on CDNow

German media giant Bertelsmann has struck an agreement that calls for Amazon.com to run the Web operations of its CDNow retail site, according to a source familiar with the expected announcement.

The agreement comes amid changes at CDNow and its parent company, Bertelsmann. As previously reported, CDNow has discontinued its affiliate program and directed its members to sign up for Amazon's program instead. Affiliate programs pay people to host e-commerce links on their personal home pages. When visitors click on the link or buy merchandise through the link, affiliates get paid a percentage of the sale.

The deal with Amazon underscores Bertelsmann's retreat from online retailing. For the past few years, Bertelsmann has invested in or acquired a handful of Internet companies in hopes of becoming a significant player in online retailing. The company invested in file-sharing service Napster, acquired music storage site Myplay and launched its own Amazon rival BOL.com.

All of these initiatives, however, have folded or have been earmarked for dismantling. Thomas Middelhoff, the architect of Bertelsmann's digital plans, was ousted as CEO in July.

What's left of Bertelsmann's online ambitions can be found in its BeMusic division. BeMusic oversees the company's direct retail operations, namely its BMG record club and CDNow.

A BeMusic representative declined to comment. However, a representative last week said that BeMusic has no intention of selling CDNow to Amazon.