Of Bubbles Burst.

Allegedly, there was a time when former Bertelsmann CEO Thomas Middelhoff regretted that his main shareholders did not allow him to accept former AOL/Time Warner chairman Steve Case’s offer to merge with Bertelsmann.

Case is said ot have contacted Middelhoff before anyone else when he decided to buy himself some turnover with his pre-burst-internet-bubble-valued stock in 1999. Reportedly, the two men are friends since Mr Middelhoff invested in Mr Case’s then ailing AOL back in 1995 and they joined forces to rival Europe’s national telcos in the end-user ISP business with – never too successful – AOL Europe. The latter company nevertheless became one of Bertelsmanns most profitable investments when then AOL Time Warner decided to buy out the Germans after there merger in January 2000.

Mr Middelhoff’s decision to help out Steve Case in 1995 paid off with 7,5 billion Euros in 2000. Bertelsmann is the only vertically integrated media conglomerate that survived the convergence wars of the late 1990s almost unscathed, not least because of the decision not to merge with AOL bak in 2000. What seemed unwise then, certainly to Mr Middelhoff, does look entirely different today. And in some way, Mr Middelhoff himself says so.

After being sacked as Bertelsmann’s CEO last year, he became a partner with the London based investment house Investcorp and if Sueddeutsche Zeitung is right, it looks like he is once again getting involved with AOL. According to the newspaper, he is one behind the rumours that German T-Online might be interested in buying 70% of (now) Time Warner’s AOL unit for one billion Dollars – roughly 1,3% of the value at which these 70% were quoted at the time AOL and Time Warner announced their merger.

It seems like a strategic fit for the Telecom subsidiary that is eagerly looking to get a piece of the US internet market as well as using the opportunity to get rid of a European competitor, should antitrust not intervene. The purchase would also open up possibilities for further cooperation with T-Mobile’s US unit, which is increasingly engaged in WLAN activities like the StarBucks hot spots, or “t-zones”, the companies’ mobile multimedia venture that, not least, recently helped Charlie’s Angels catch Demi Moore.

But there’s a reason AOL is not too expensive these days: the company has problems getting their broadband services right and has recently lost some of its 25 million clients. T-Online’s success is primarily based in Germany, where its broadband service is almost unrivalled. It is certainly questionable if the company would be as successful on the far less hospitable US market.

Plus, there’s the brand issue. America Online owned by Germans? Or Germans getting rid of AOL as a brand? I’m sure, some pollsters are already asking American consumers interesting questions…