Checkout.com, Wherehouse to Merge Web Sites

In a deal underscoring how traditional retailers and online sites are continuing to seek ways to enhance each other’s businesses, Wherehousemusic.com and Checkout.com, the entertainment and e-commerce site funded by Michael Ovitz and supermarket magnate Ron Burkle, will announce today the closing of a $40-million merger of the two sites.

Under terms of the deal, Torrance-based Wherehouse Entertainment will invest $20 million in cash in Checkout.com for a roughly 50% stake. Burkle’s Yucaipa Cos. and Ovitz have already invested about $20 million, and will put up another $20 million.

Wherehouse, which has already merged the Wherehousemusic.com Web site into Checkout, will also promote Checkout in its 550 record stores nationwide, in part by installing electronic kiosks featuring the site.

The merger is an indication of how traditional retailers and online sites are continuing to search for a formula for luring visitors to the Web and turning them into customers.

Checkout.com was launched as a combination entertainment-information portal and e-commerce site focused on music, videos and games. But it soon found that the combination perplexed users, according to Richard Wolpert, its chief executive.

“We learned by putting everything on the same page at the same time that the people looking to buy were getting too much content, and the people looking for content were getting too much of a selling message,” he said.

Checkout will roll out a redesigned Web site next month.