Bertelsmann AG opens its head office in Beijing, China.

Appointed to the capacity of Chief Executive to head the China operations is Mr. Yu Le, a media
veteran in China.

According to Gunter Thielen, Chairman and CEO of Bertelsmann "…this office is tasked with
helping the (six) divisions (of Bertelsmann) and all our partners and friends in the government.
This office will give Bertelsmann a necessary face and presence in the media industry in China".

The opening ceremony was officiated by Gunter Thielen, Chairman and CEO of Bertelsmann with
Dr. Ewald Walgenbach, Executive Board Member of Bertelsmann AG and Michael Smellie,
President of Media Development Asia Pacific, in the presence of the owner of Bertelsmann AG,
Liz Mohn, Chairperson of Bertelsmann Foundation, and witnessed by high-level government
representatives, media members and long-time business partners.

Thielen encapsulated his points saying "…(the many) activities (of the group that are already in
China) form a solid basis from which to expand our involvement in China. For us at Bertelsmann,
China represents an important gateway to Asia. We also want Bertelsmann to serve as a
gateway to the world for China".

Guests at the celebration party were given a surprise private performance by international guest
artist Kenny G, the acclaimed saxophonist-cum-musician and composer, brought by SONY
BMG.

During the opening ceremony Thielen said, "…China and Bertelsmann have a very fundamental
characteristic in common: history and tradition (both) are as important to China as they are to
us at Bertelsmann. Our company has a history that reaches back more than 170 years. This
history is the reason that we rely on a long-term approach, on sustainability and partnership in
doing business".

He added "…all of Bertelsmann's people are committed to finding ways in which we can further
expand the cultural exchange between China and the world".

This multimedia giant has strength of over 80,000 worldwide. Under the wings of Bertelsmann AG
are six groups of companies - Direct Group, Gruner+ Jahr, arvato, Random House, RTL and Sony
BMG of which they owned 50 percent.

Sonopress, one of the world's largest media corporations and a subsidiary of the Bertelsmann's
arvato division, was the first to establish a foothold in mainland China some 15 years ago in the
storage media business. Then in 2000, Bertelsmann made the step to incorporate the arvato
group in Shanghai.

arvato has since been growing operations very successfully in call centers, loyalty programs,
logistics and IT services in China. One of the key loyalty program managed by them is the Air
China frequent flyer card programme.

"From 1995, the Direct Group has also been expanding in China. The group is not only present in
China with their well-known book club business, but also through retail operations and its
distribution joint venture with Liaoning Publishing Group."

Then in 1998 saw the entry of Gruner + Jahr into China. G+J partnered with BODA, one of China's
top magazine brands. Together with its four existing titles will see the opening up of exciting new
possibilities for G+J in developing its sizable magazine portfolio, which includes the Ray Li brands
as well as titles such as Fitness and Parents.

By 2002, China saw the landing of the first SONY BMG office in Shanghai. And recently the group
opened yet another office, in Beijing, to further develop their roster of artists under its 23 labels.
SONY BMG is the world's second-largest music company.

The RTL Group, the pan-European TV and radio broadcaster, is working hard through its TV
production unit, Fremantle, to create local Chinese formats with the potential of also bringing this
content to a broader worldwide audience. The company has, over the years, also been active in
producing radio contents.

Meanwhile, the world's largest trade book publisher, Random House, is also actively exploring
opportunities here in China. "(Random House) is …home of (authors) Dan Brown and John
Grisham and will hopefully be in the position to formally enter the Chinese market in the near
future and add more Chinese authors to these stars", said Thielen.