Thursday, February 28, 2008

Harlequin Improved

Harlequin revenues were flat for the full year 2007 versus 2006. Revenues of $462mm versus $471mm in the prior period were negatively impacted by foreign currency which accounted for almost the entire variance. EBITDA showed some improvement with 2007 results of $65mm versus $63mm. Excluding the impact of Forex EBITDA was $6.3mm better than 2007.
From their press release:

Excluding the impact of For Ex:

  • Overall Book Publishing revenues were down $1.0 million in 2007
  • North America Retail revenues were up $3.6 million
  • North America Direct-To-Consumer revenues were down $5.0 million
  • Overseas were up $0.4 million
  • Overall Book Publishing operating profits were up $6.3 million
  • North America Retail operating profit was up $5.8 million
  • North America Direct-To-Consumer operating profit was up $2.2 million
  • Overseas operating profit was down $1.7million

The company has spoken about their efforts to manage expenses in the North American business and they seem to have made some impact in that direction with the improved operating margins. Additionally, the company was not beset by any unforeseen operating issues that bedeviled them in prior years (like the bankruptcy of a distributor). The company also said that improved sales via the internet - primarily direct to home - price increases and lower (presumably more effective) promotional spending also supported the better margin performance.

It appears the company is focusing now on improving their international operations which appear problematic. The company recently announced an expansion of their efforts in Indian, which is not material in their current results, but they must also look to improve results in Japan and the UK. In both these countries there appears to be a shift in how consumers interact with Harelquin (Mills & Boon) with decreases in direct to home in the UK as an example. The company will look to use their experience in the US to improve the UK market. In Japan the company is experimenting with Manga versions and mobile phone distribution but as yet these efforts have not been significant to offset the decline in core sales.

Press Release

Of note also, is that Torstar the corporate entity that owns Harlequin also posted solid results especially in light of the declines in newspaper properties. Torstar revenue of $1,546.5 million grew 1% and EBITDA of $225million grew 11.5%. The company stated that all their primary operating units performed well.

Informa Posts Strong Results

Chairman Peter Rigby has ruled out bidding for the trade magazine division of Reed Elsevier (Reed Business Information) saying the advertising business is not one they are in. The company did however post strong financial results that were in line with the expectations set in mid-December. The acquisition of Datamonitor which at the time seemed an expensive deal looks to have been integrated well and already producing impressive results. From their press release here are their highlights:
  • Revenue £1.13 billion – 9% pro forma growth
  • Adjusted operating profit £261.0m – 19% pro forma growth
  • Adjusted operating margin rises above 23%
  • Strong trading across all three divisions (Academic & Scientific, Professional and Commercial) and all three business streams (Publishing, Performance Improvement and Events)
  • Datamonitor delivers 22% pro forma revenue growth for the full year
  • Adjusted cash conversion 110% of adjusted operating profit
  • Total dividend increases 39%
  • Confident of 2008 outlook
  • Academic and Scientific division grows adjusted operating profit by 25% to achieve a 29% margin
  • Strong yield increases and drop through from electronic delivery
  • Professional division benefits from Performance Improvement extending global reach
  • Non-US revenues increase by 29%
  • Commercial division growth fuelled by extension of Large Scale Events portfolio and 38% increase in Dubai revenues
Chairman Rigby: "We have transformed Informa in recent years. We have built a business based on recurring revenue streams which provides strong defensive qualities, but not at the expense of continuing good growth. We are of course aware of the current uncertainty in the financial markets, but at this point the board sees no signs in our trading to alter its expectations that Informa will deliver another strong performance in 2008. Our confidence in the future of the business is reflected by a 39% increase in the dividend over 2006."

Wednesday, February 27, 2008

Wolters Kluwer Reports Results

Wolters Kluwer appear to have completed a strategic transformation of their business which began more than three years ago as the current CEO Nancy McKinstry took up her role. The company did not see significant top line improvement in 2007 - up 4% - but they have gained in operating margin to 20% and with a better product mix they should continue to see improvement. During 2007, the company divested their education division and booked a nice gain (similar to Reed and Thomson in that respect).

In her comments, McKinstry noted that over half the companies revenues come from online and electronic products and services, and she believes improved results will derive from this better product mix. As the company continues to invest in work-flow solutions and integrated products she went on to say "I am confident in our ability to leverage our superior market positions, our improved organic growth and more efficient operating structure to achieve enhanced value to our customers and shareholders."

Other highlights from their press release:

  • Organic revenue growth was 4% (2006: 3%)
  • Reported revenues of €3,413 million, grew 6% in constant currencies (2006: €3,377 million)
  • Ordinary EBITA margin improved to 20% (2006: 17%)
  • Ordinary EBITA of €667 million increased 27% in constant currencies (2006: €556 million)
  • Diluted ordinary EPS increased 25% to €1.38 (2006: €1.10), 35% in constant currencies
    Free cash flow of €405 million (2006: €399 million, which included a €53 million one-time tax refund)
  • Revenues from online and workflow solutions grew 9%
  • Structural cost savings of €161 million, an increase of 26% (2006: €128 million)
  • Divestment of Education: sales price €774 million; book profit €595 million; net proceeds €665 million
  • Share buy-back program completed (€645 million returned to shareholders)
  • Net profit for the full year was €918 million (compared to 2006: €322 million), supported by he divestiture of the Education division

Tuesday, February 26, 2008

Five Questions with

A few months ago, a website dedicated to authors named was launched and was noted by SF Chronicle., which premiered Dec. 21, is one of the more ambitious online communities for writers to date and perhaps the most timely, aiming to capitalize on the current potential for profitability of social-networking sites. It features 150 authors (with 400 more to come), ranging from Amy Tan and Salman Rushdie to Edinburgh Castle Pub owner Alan Black; Graham Leggatt, executive director of the San Francisco Film Society, who moonlights as a sci-fi writer; and local mystery writer Cara Black.
The site has been well funded and has a strong list of staff members all of whom are 29 yrs old. In addition to the brand name authors noted above, also received the endorsement of Barack Obama who, as an author, joined the community earlier this month.

Ivory Madison is the founder and CEO of the corporation and was kind enough to answer my five questions.

Question 1: There is a lot of background information about the genesis of your site but I am curious as to how you convince authors that they should belong to a social web site like RedRoom. How do you pitch this idea/concept to the big name authors like Salman Rushdie?

Big name authors are just like relatively unknown authors in that some of them are extremely friendly and helpful, and some are not. There’s a different story with every author. In the case of Salman Rushdie, one of the friendly and helpful ones, we made him aware of our interest in supporting public discussion of new books beyond just the best-sellers, which is a cause of his, too. Also, since he didn’t have a website, perhaps finally having an official home online was appealing—you know, some famous authors are frustrated by how much misinformation there is about them on the internet. Authors find it daunting to design and build a website, even if they can afford it, and they’d much rather be asked to join a community where all their friends are, and where the technology is so easy to use, now that there is one.

Question 2: What do you expect of the authors as they ‘socialize’ at Redroom. Thus far, has the interaction surprised you in any way with respect to the amount of participation or the (perhaps) different manner in which they use the site which you may not have anticipated?

I have been surprised and delighted at how positive and funny everyone is. I mean, everyone is so encouraging, and authors, not just readers, are posting fun comments on other authors’ pages. The culture has a life of its own. I’ve also been surprised how, every day, some authors take the time to write original, long, brilliant, fully edited essays for our homepage and as blog entries. Really amazing work on politics, on divorce, religion, media, philosophy…and it’s there for anyone to read, anywhere in the world, for free. So far, I’m in awe, because we’ve barely rolled out a small number of the features I envision us offering. The blogs are the hotspot. If you go to the central blog page at ,, you’ll see all the latest blogs, just posted. That’s everyone’s favorite page.

Question 3: In your PR material you indicate that you will soon reach a community of around 500 authors. Is this a managed level of do you see the site growing significantly larger beyond that size. Assuming you want to grow larger do you see any issues with the mix of ‘celebrity’ authors and those possibly less blessed?

We already have hit the 500 author mark, in less than 60 days of the site being live, and we have another 500 in moderation waiting to be approved. Every day, our developers work on scalability issues, trying to find an interim solution while building the long-term solution, to make the site user-friendly as we grow. We intend to be the starting point for finding authors, so we’ll keep growing rapidly. As for the celebrity issue, we already have more non-celebrity authors than celebrity authors, and they interact. Some of the busiest pages are those of lesser-known authors who are real community-builders, and so most the “stars” on our site are people you may have never heard of (although one of our most prolific bloggers is one of our most famous—Amy Tan). The platform gives unknown authors a chance to promote themselves and be part of a larger conversation with a larger audience.

Question 4: The SF Chronicle notes you are the MySpace for Authors. Is this moniker something you are comfortable with or not? Do you see yourself doing the same for lesser known authors as My Space has done with musicians?

We like when we’re called the “MySpace for Authors” because it’s quicker and people say, “ahh, I get it,” and I don’t have to explain much further. We’re different in many ways, of course. Our authors must apply and not all are approved, much of our content is pretty great—educational and entertaining, you don’t need to know anything about programming to make your Author Page look good, and most of our users are well-read and good writers. I agree that we’ll provide the same important service for lesser-known writers than MySpace did for bands; that’s a great analogy—one that one of our founding authors, Po Bronson, suggested to me when I was still sketching out the site on cocktail napkins.

Question 5: What about this community has surprised you since you launched the site? What can we expect next from Red room?

It surprised me that authors are so honest and revealing, sharing experiences such as the death of a loved one, or a miscarriage. It surprised me that authors showed up at my office with champagne, cakes, signed books, in gratitude for finding them new readers or just making them feel they finally had a home online. What can you expect next from Great question to finish up with: In just a few weeks, we’re rolling out Member Pages, which will be very similar to Author Pages, so that aspiring writers and avid readers can participate. Since you work with publishing professionals, keep watching Red Room through the rest of the year as we roll out Publisher Pages. With the Author Pages, we asked all the authors we knew what they wanted, now we’re asking publishing professionals what they want and we’d love to hear from them about what we could do to make them feel at home, too.

Monday, February 25, 2008

Proquest: In Case You Care

Proquest, hereafter referred to as Voyager Learning Company is for sale. The company announced they had retained Allan & Co. to determine strategic options for the company. So far has Voyager fallen, that this news barely caused a ripple of notice from industry outlets. No doubt the bank will already have done the rounds with all educational publishers to gin up some interest. As some will recall, the company has sold all saleable assets of the company over the past four years but it has also been embroiled in accounting irregularities, had its stock delisted and is also the target of copyright and shareholder lawsuits. This is pretty grim news for a company with such a long and illustrious history which included brands such as Bell & Howell, UMI and even R.R. Bowker. (If you are not paying attention they join CQ Press and Haights Cross as recently 'in-play' educational publishers).

The company finally produced their 2005 10K on August 31 last year and announced a few weeks ago that they would produce audited 2006 accounts by the end of first quarter 2008. The only good news about this appalling schedule is that they “anticipate much of the 2007 work will be done in parallel with the 2006 work” and thus may be almost caught up by April.

There have been a number of management changes as a result of the divestitures and the irregularities. The company is now run by Richard Surratt, Voyager Learning Company's President and CEO. The remaining business operations of the company are now in Dallas and Voyager has reduced to 11 the number of employees still in Ann Arbor. (Imagine the morale there). As the accounting becomes clearer so will the current net value of the business; further asset write downs are possible and whether these result in significant income statement charges which in turn result in transferable tax credits remains to be seen. The company did revalue goodwill as a result of their restatement resulting in a $180mm charge to the 2004 income statement.

The company appears to be performing satisfactorily and while they have completed a reinvestment of their core product line they operate in a very competitive marketplace in a down market. The company expects to have $75million to $85million in cash by year end which is lower than planned due to the loss of a copyright lawsuit ($7mm) and lower full year revenue expectations ($3mm).

The company faces a consolidated shareholder suit and the company expects discovery to start sometime in early 2008 and eventually go to trial in 12-24mths. They have lost one attempt to have the suit dismissed. The law issue complicates matters significantly not least because in reading some of the employee agreements (bolstered by stay bonuses) they expect a sale of the company within the next 12mths. Who will be around to defend the lawsuit and who will pay for that? The company also have a derivative law suit that "asserts claims for breaches of fiduciary duty, abuse of control, gross mismanagement, constructive fraud, and unjust enrichment." and "breaches of fiduciary duty, abuse of control, gross mismanagement, constructive fraud, and unjust enrichment" (10k). (Sounds like someone checked every box on the form).

The company combines Voyager Expanded Learning, ExploreLearning and Learning A to Z into the category “Voyager Operating”. The following is from their earnings conference call:
For the three quarters ending September 30, 2007, the Voyager Operating business had estimated and preliminary revenue of $87 million, Earnings from Continuing Operations before Interest and Income Tax, which is referred to here are as EBIT, of $10 million and EBITDA of $26 million. This compares to preliminary revenue of $94 million, EBIT of $13 million and EBITDA of $30 million for the same nine month period of 2006. Due to Q3 results coming in less than expected, we are adjusting our previously issued full year guidance to a range of $106 to $112 million in revenue versus previous guidance of $116 to $124 million. We project a resulting EBIT range of $7 to $10 million versus the original guidance of $10 to $13 million. And lastly we are updating our EBITDA guidance to a range of $29 to $32 million versus original guidance of $32 to $35 million.
Reviewing their 2005 10K shows how significantly the company has been transformed.

  • Net sales of $545.9million versus $439.6mm in 2004
  • EBITDA of $28.9mm versus $(149.1)mm in 2004 which included a goodwill impairment charge of $180mm
  • Full year revenues for Proquest Education (Voyager Operations) were $91mm in 2005
  • Proquest Information & Learning revenues were $271.4mm. This is the business unit sold to Cambridge Information Group for the bargain basement price of $218mm in February 2007. Operating income may be a loss of around $10mm - hard to say given the presentation.
  • 2005 revenues for the automotive group were $183mm and this unit was sold for approximately $490mm. Go figure.


Allan & Co. Press Release


Sunday, February 24, 2008

Times Online Notes E-Book Opportunity

The Times Online looks at Cookery books and notes this:

This enduring power of the cookery book is worth bearing in mind when Sony and Amazon, and doubtless others, eventually inflict their electronic book readers on the British public. Their arrival, probably this year, undoubtedly will be accompanied by excitable speculation about the death of the book, predictions about the inevitabilty of digital domination and the expectation of hard times that lie ahead for publishers. Ideally, all this discussion will appear in physical newspapers and magazines before the writer turns, later that day, to reading their hardback/paperback tome of the moment. Never mind, it is easy to overvalue the impact of new techology (those with long memories may recall an excitable discussion about virtual reality a decade and half ago).

They go on to make a point I have raised:

That means a consumer really has to want to buy a digital book reader. It might cost twice the annual book bill. So the only way that electronic readers will take hold among consumers is if they become a good way of reading other printed products, such as newspapers or magazines.

Couldn't have said it better myself... (Link)

The price of the Kindle is approximately $300. I would argue, rather than reducing ebook prices to $5.99 (versus print prices of $20) the pricing for the device should be similar to the razor blade/razor model. Even then I am not sure the model would work. Why? Because most readers don't read that many books. Most of the readers of publishing blogs like this one, O'Reilly Radar and those with a publishing audience represent a skewed view of the appeal of reading. We all love it and we all do a lot of it. Regrettably, the rest of America is not like us and on average the average book buyer will read less than 3 books per year. (Research studies note that even 'book buyers' are a small group).So aside from early adopters and techno-fadists who flocked to acquire the first Kindles who will buy the next batch? If the average reader buys three books a year for a total of $90-100, why would they buy an ebook reader for $300 even if those three books were free? Your average consumer is not a dummy and can do the math.

Links of Interest

The Dallas DA has released boxes of material relating to the assination of JFK. The Dallas Morning news has launched a crowdsourcing effort to classify and identify the documents. Link. Tip o' hat to Brantley).

I wasn't aware Apple has an iTunes site dedicated to selling educational content to universities and students. Link

Larry Lesig may run for Congress and has launched a Change Congress initiative. (Tip to Hodgkin).

Stephen Fry has launched his Podgrams and also has an enjoyable post about digital cameras.
"Just about everybody who needs a camera has one. What is wrong with that Ixus I bought three years ago? That old Pentax Optio will see me through to my old age, don’t it? No! No, you crazed enemy of freedom, you wild-eyed anti-capitalist, you deranged luddite. Haven’t you heard of Face Detection Technology? Smile Capture? Best Shot Automatic YouTube Uploading?
WorldCat has a blog all to its own.

Shatzkin on horizontal to vertical redux.

Apax is already sniffing around Reed Business Information. Link

Tell this to Harpercollins. Link

Friday, February 22, 2008

Charkin Returns

Just as the opening credits role in High Plains Drifter, we discern the image of the returning fighter but its not Eastwood it's Charkin returning from the blogging wilderness to post a brief effort on Eoin Purcell's site.
Sales of some novels are spectacular but even the most spectacular compare in revenue and terms very unfavourably with, for example, a drug, a car, an airline, or an oilfield. As an industry we should be very grateful for all the attention (and I am) but why this journalistic obsession with the economics of books and fiction in particular?

Still no news about his permanent return.

Mills & Boon in India

The BBC takes up the story of Mills & Boon (Harlequin) entering the Indian market which I noted a few weeks ago. Link
Although Mills and Boon - which has nearly three-quarters of the romantic market in its home country of the UK - is only now launching in India, their books are already popular in the country because they have been unofficially introduced from abroad.
Many in the reading group describe themselves as long-time readers.

Reading groups members acknowledge the stories are fanciful. Rachana Srivastava, for example, says that she grew up on a "staple diet" of the publisher's works, which have moulded her perception of the ideal man.

My post: Hold on to your Sari (I really only note it because I was particularly proud of my headline).

More Reed Elsevier

Reed announced preliminary results yesterday which were somewhat overshadowed by the announcement of the Choicepoint acquisition and the proposed divestiture of the Reed Business Information division.

In the earnings presentation CEO Davis noted that their revenue growth is ahead of the market, their operating margin continues to improve year over year and the company is delivering good cash generation and EPS growth. Over the past four years underlying revenue has grown between 3-6% per year but it is operating profit which has seen annual growth expand from 3% in 2004 to 10% in 2007. Operating profit growth has improved faster than revenue due to the changing sales mix toward on-line revenues as well as corporate wide initiatives on costs reduction and consolidation.

In discussing the proposed divestiture of the RBI business, Davis used justification similar to the comments used to explain the Harcourt divesture but it boils down to several things. First, the online component of RBI is not growing fast enough to keep up with Elsevier, LexisNexis and Martindale. This will dampen long term revenue growth for RE. Second, the timing and investment required to speed the process could be significant and Third, the payback is not obvious in so far as online ad based 'magazine-type' content has yet to establish itself as a business that can replace revenues from print based subscription and advertising. Davis's comments reflect forward thinking regarding the strategic growth of RE as a platform based content solutions provider: Financially the current position of RBI is quite strong versus their segment. Indeed their performance supports the suggestion that Davis will not rush to sell RBI and is open to various scenarios.

In 2007, RBI revenues were £906m up 3% and operating income was £119m up 8% over the prior year. Offline revenues account for 70% of total revenues. Despite the long term concerns of Davis, this appears to make RBI a £300m online trade magazine/business information publisher which will prove a strong selling point for investors when they come to kick the tires. (Online revenues were up 20%). Currently, RBI includes Reed Exhibitions which the company has decided to retain. According to the company, Reed Exhibitions has continued to grow aggressively and perhaps, there are more business opportunities across the RE properties which management believe can be leveraged. Additionally, management may be considering expanding Exhibitions through acquisition. Exhibitions revenues were up 12% in 2007 and operating income up 8%.

It will be interesting to see how this divesture plays out. The division has some brand-name assets including Variety and Publishers' Weekly but it may be the more mundane titles that have been driving the online growth and investors may be more impressed with these units than the bigger brands. That could lead the way to a break-up strategy with some of big brand properties going to separate buyers and a strategic buyer purchasing the balance of the company. For example, I could see Variety going to Zuckerman or Wasserstein.

Note: Reed also noted the sale of Harcourt generated total proceeds of $4.95bn which was a 3.0x multiple of 2006 revenue and a 20.8x multiple of 2006 adjusted operating profit. The divestiture generated a substantial disposal gain.

Reed Preliminary Results presentation.

Thursday, February 21, 2008

Reed Elsevier Acquire Choicepoint

In my predictions for 2008 I noted that we would see increased activity in the insurance business information space. In my view, this space is ripe for the type of consolidation seen in law, tax and business information that results in dedicated and must have information platforms for practitioners and analysts. Both Thomson and Reed dominate the law and tax segments and it looks like Reed is taking the first step to dominate and create a platform application for the insurance industry. Reed announced this morning that they will by Choicepoint for $3.5bill and assume $600mm in debt.

Commenting on the acquisition, Sir Crispin Davis Reed Elsevier's Chief Executive Officer, said: "The acquisition of ChoicePoint represents a major further step in the building of our risk management business and in the development of Reed Elsevier's online workflow solutions strategy. The market growth in risk information and analytics is highly attractive and ChoicePoint brings important assets and market positions that fit well with our existing business and, in combination, can be leveraged to very good effect.

The new unit will be combined with existing risk management revenues in the Lexis business unit that will result in a business unit with over $1.5billion in revenue.

Other points from the press release:

  • ChoicePoint has a leading position in providing unique data and analytics to the attractive insurance sector (over 50% of Choicepoint's $982 million revenue and 80% of its business operating income from continuing operations in 2007) and highly complementary products and new capabilities in the screening, authentication and public records areas.
  • The combination of ChoicePoint's highly regarded data and analytics assets with LexisNexis's market leading technology can be leveraged to create greater opportunities in addressing the growing risk information and analytics needs in insurance, financial, legal, screening, law enforcement, public safety, healthcare and other sectors.
  • The combination will improve top line growth and deliver considerable synergy benefits through the application of powerful technology, increased scale and integration of resources.
  • The acquisition will accelerate Reed Elsevier's revenue and profit growth; is accretive to adjusted earnings from the first year; and is expected to deliver a post-tax return on capital in excess of Reed Elsevier's cost of capital by the third year, with returns continuing to climb thereafter.
  • Consideration of $50 per share in cash; unanimous recommendation of the ChoicePoint board; subject to ChoicePoint shareholder and regulatory approvals. Acquisition to be financed from committed new bank facilities.
  • The acquisition significantly enhances Reed Elsevier's portfolio through expansion in these attractive long term growth markets, and accelerates Reed Elsevier's progress in providing online solutions embedded into customer workflows.

The strategic importance of this acquisition for RE is noted in the last bullet where the company emphasizes the importance of workflow solutions for their customers. Information is not a commodity, but is only a component of a broad market offering. A company offering monolithic data products; that is the online equivalent of a printed database, will continue to face market challenges in competition with more integrated offerings where content is a component in a larger holistic workflow tool.

In a closely related story, Reed also announced that they will sell the Reed Business Information unit. This sale has long been rumoured and analysts have suggested that Reed should have vacated the space long ago; however, Reed were progressing through a logical strategic revamp which has culminated in the acquisition of Choicepoint, the divestiture of Harcourt and now the sale of RBI. The company says the divestiture will reduce exposure to the cyclical advertising markets, which of course was as true today as it was five years ago. Best guess would be private equity.

The same press release also notes their full year 2007, results with underlying revenue growth of 6% supported by online information and workflow solutions. Topline reported revenue was £4,584m up 2%. The company also saw operating margin improve as a result of favorable product mix with underlying margin up over 100 basis pts. Adjust EPS was up 12% in constant currency. The company noted that adverse exchange rates materially impacted the results. More in the press release.

Wednesday, February 20, 2008

Lulu Publishes 4,000 Titles per Week

The Guardian takes a look at the US self-publishing market and notes some impressive statistics fron
Lulu says it publishes 4,000 new titles each week and already has a catalogue of 232,000 books. "Our success is that each week we publish between 10 and 20,000 titles; one at a time," said , the senior vice president of operations at the company, Andrew Pate.

The company is only five years old and says it is doubling in size every year. Earlier this year, I noted the growth of which published 80,000 titles during 2007.

The Guardian also discusses and AuthorHouse as variations on the theme and notes the recent new relationship between Borders and Lulu. More from the article:

It is not only business people who want to self-publish. Lulu's Pate says an ageing population, with more money, more life experience and more time on their hands to write will combine with the new and improving technologies to help drive the self-publish business. The ubiquitous use of Microsoft Word together with desktop publishing software, digital printing technologies and workflow solutions linked to the internet and "bang, you have got a whole new market that could not exist without each of those pieces together".

Cengage Reports Second Quarter

Second quarter revenues and EBITDA were negatively impacted by a change in accounting for deferred revenue and as a result Cengage reported slightly lower (1.2%) revenues versus their prior period. Revenues were $496mm and $502mm for 2008 and 2007 respectively. The impact of the change in deferred revenue accounting had a 100% flow-through impact and as a result EBITDA was 7% lower than the period last year ($148mm versus $160mm).

The company recorded a strong first quarter and despite the account change year to date revenue and EBITDA were 2.3% and 3.0% higher respectively. Year to date revenues were $1,146mm and EBITDA was $409mm. Margin is holding steady at a healthy 35.7%.

Other highlights:
  • Academic and Professional YTD revenues and EBITDA are up 4.9% and 5.6% respectively. YTD revenues and EBITDA are $791mm and $347mm
  • Gale YTD revenues were lower by 4% but EBITDA was up 2.1%. YTD revenues and EBITDA were $167mm and $63mm
  • International YTD revenues were higher by 7% but EBITDA was lower than prior year by 4%.
The company indicated that their plans are ahead of schedule on cash flow, cost savings initiatives and projected EBITDA.


Tuesday, February 19, 2008


Another big name author has followed the money and moved from his long term publisher. Richard Ford has moved from Knopf to Ecco after 17 years, and he follows Tom Wolfe who earlier in the year moved from FSG to Little Brown. Who can blame them? This is not a trend, as authors do move around periodically (and take their editors with them). It will have little impact on traditional publishing. The mid-market and specialty author is not suddenly going to be in a better competitive position vis-a-vis the publishing houses. What strikes me as curious, though, is that we haven't seen incursions by web companies such as Google, Microsoft, Amazon and Ebay into the original content business. Yet.

It seems so logical that one or a few of these companies will experiment in some way with branded authors. We all know the author brand is primary and we also know that some authors have become aggressive in expanding their brand - Patterson as the prime example. It may be inevitable that a major author(s) signs a three book deal with Google or Amazon. According to Publisher's Lunch, Wolfe received between $5mm and $7mm (these numbers from several sources) for his deal. It is a sad reflection on the publishing industry that these figures represent little more than gas money for the larger internet companies. Skills in book production, design, marketing and promotion, etc. are readily available and would not represent an impediment to success. It is really the expanded catalog of skills and expertise that an internet company could bring to bear that could be really interesting for authors and consumers.

Launching Major Author X via 'GooglePub' or similar would transcend the traditional publishing model and, perhaps, return it to something more like the publishing of the late 18oos where serialization (blogging) and direct reader involvement (social networking) were fundamental elements of trade publishing. (Remember Doyle trying to kill off Holmes, resulting in near riots from readers?) One of the most interesting aspects of the Radiohead experiment was that they finished their album only two weeks before it was available for download. In the world of publishing, the length of time from finished manuscript to bookstore can be years. Not only would consumer access be much faster in a 'GooglePub' world but the engagement with the author and the authors' work could be far more intense (and positive) for both author and reader.

Imagine the author maintaining an ongoing rapport with readers as the book is written. The author blogs about the process, posts excerpts, background material relevant to the story, and plot and character notes. The author publishes finished excerpts (ie. serialization), as development continues. Perhaps derivative titles or sequels are also initiated. Audio, Podcasts and video is made available. At the launch of the title, the book will have been exposed to millions of readers - perhaps all of the title has been published in parts or not - but the excitement will be significant. During this time, site traffic will also have grown and perhaps an advertising revenue share for the author will also augment their annual guarantees.

As in the Radiohead example, a physical version will be produced but, even here, the model could change. Perhaps 'GooglePub' strikes separate deals with B&N, Borders or others who produce their own versions of the titles by selecting from the wealth of content available as a direct result of the content created during the process. Basically, the author and 'GooglePub' leave it up to the physical publisher to create the physical product and just take a (painless) cut of revenues.

Publishers can't compete with this model. By the same token, the process could give rise to a new caste of publishing staffers who are familiar with the web-publishing model, social networking and engagement and who become required assets as authors migrate their brands to the internet. An interesting scenario: How prepared are large trade houses if their top-ten branded authors defect to 'GooglePub'?

Sunday, February 17, 2008

Livemocha in NYTimes

I have commented on the language learning provider Livemocha and they were profiled in the NY Times over the weekend:
LiveMocha introduced its Web site in late September 2007, said Shirish Nadkarni,
chief executive of the company, which is based in Bellevue, Wash. Since then, he said, about 200,000 users from more than 200 countries have joined. “It’s a community of like-minded learners who can leverage their native language proficiency to help one another,” he said. The name “LiveMocha” is meant to evoke the relaxed atmosphere of a coffee shop. The site is still in beta, or testing, phase, Mr. Nadkarni said. Advertising will soon be added, as well as charges for some premium content and services.
The company recently closed on $6mm in additional funding.

San Francisco

I spent most of last week in San Francisco. While NYC received its first appreciable snow (and then heavy rain to wash it all away), I was wandering around in almost 70 degree weather and havinig a lovely time. I did do some work as well.

Created with Admarket's flickrSLiDR.

Click on each image to see brief descriptions of the image.

Thursday, February 14, 2008

175,000 First Chapter Excerpts (And Counting)

I wasn't excessively clear in my description of the Dial-a-Book model and Mr. Greenfield has rapped me on the knuckles and asked me to correct the article. Obviously, he is quite correct to ensure we understand his business model. From Stanley,

You write:

"The idea of building a business (let alone expanding as he continues to do) on the precept that he will scan and re-key the first chapter of a book so that the content can be distributed as merchandising material in this day of e-content seems anachronistic. No telling how long it will continue to go on and many (including me) have expected publishers to take this over themselves and obviate the need for Dial-a-Book. Yet, he continues to flourish."

Michael, were this the case Dial-A-Book would not exist.

Most of the major publishers do create there own excerpts which they mount on their own sites .... and send to us for reformatting and distribution.
Our value is not that we create excerpts but rather that every excerpt we distribute is automatically mounted by

Barnes & Noble, Baker & Taylor, Ingram, EBSCO, Books-in-Print,, OCLC .... if they handle the books

… and by more than 1,600 library OPACs (e.g. San Francisco, Cleveland,
Seattle Public Libraries) if they hold the books in their collections.

Moreover we are the exclusive excerpt providers to all of the above, with the exception of Barnes & Noble. None of the others will mount any except unless it comes from Dial-A-Book. Every excerpt in any on-line public access catalog (OPAC) in the US is a Dial-A-Book excerpt.

The reason is that we provide an AGGREGATION function.

They would rather pay our modest charges to recieve 50,000 excerpts a year, in two deliveries a month, in a consistent format, which they can algorithmically access, or enter into their systems and servers, than receive 300 Random House excepts on a Monday, 200 Harper Collins on a Tuesday, 150 Simon & Shuster on a Friday, etc, in a variety of formats..

Dial-A-Book delivers an essential service for publishers, web sites and OPACs by the aggregation function it performs. Its unique data base contains 185,000 first chapter excerpts prepared and distributed with the permission of more than 1,400 imprints/publishers.
I would greatly appreciate your rectifying this matter for the readers of Persona Non Data lest they believe the need for Dial-A-Book can be obviated.

The original post as follows:

My friend Stanley Greenfield tells me he now has an astounding 175,000 first chapter excerpts and to think I knew him when he had less than 5,000. The idea of building a business (let alone expanding as he continues to do) on the precept that he will scan and re-key the first chapter of a book so that the content can be distributed as merchandising material in this day of e-content seems anachronistic. No telling how long it will continue to go on and many (including me) have expected publishers to take this over themselves and obviate the need for Dial-a-Book. Yet, he continues to flourish.

Here is more material from Dial-a-Book:

During 2007 Dial-A-Book continued to drive book sales and library readership as it delivered more than fifty thousand new first chapter text excerpts to its partners, e-commerce sites, media, bibliographic services, library on-line public access catalogs. The Dial-A-Book data base now contains excerpts from 175,000 ISBNs. All excerpts are produced and distributed with the permission of 1,400 imprints/publishers. The DAB Chapter One program is the exclusive excerpt provider for Baker & Taylor, Ingram, Books-in-Print, OCLC, EBSCO,, Diesel e-books, and library on-line public access catalogs. Every excerpt appearing in any US library-on-line public access catalog (OPAC) is provided by DAB. In our continuing effort to support our partners we have enhanced our systems with a new mobile platform. The platform will allow more than five millions iPhone, iTouch and Windows Mobile users to browse our 175,000 book excerpts. Software development continues to extend the use of excerpts to other devices.

The Dial-A-Book Publishes Portal™ was successfully launched in 2007. It has been promoted by the International Publishers Association (PMA), Independent Publishers Group (IPG), Midpoint Trade Books and author services companies like AuthorHouse, and Infinity Publishing. Publishers Portal guarantees the display of book first chapters by the web sites and library on-line public access catalogs for which Dial-A-Book is the exclusive excerpt provider, if they handle the books or hold them in their collections. Our thanks to all our partners whose cooperation made this progress possible. Text excerpts are being increasingly displayed. This is testimony that CONTENT SELLS. We invite inquiries about how you can derive the greatest benefit from participation in Publishers Portal and Chapter One.

To learn more about Dial-a-Book contact Stanley Greenfield at 718 432 0014 or email:

Death of a Magazine Redux

Earlier this week MediaPost noted the almost 20% decrease in newstand sales of Time magazine for the second half 2007 versus the same period in 2006. Adding the bad news, subscription sales also fell 17%. From their article:
In November 2006, Time cut its rate base 18.8% to 3.25 million, so the decline in subscriptions may be due partly to a purge of "junk" circulation, including automatically renewed subscriptions. But it's hard to put a good spin on the steep drop in newsstand sales, which advertisers often view as an indicator of audience engagement. Ironically, the declines follow a major redesign that was intended to make the magazine appeal to a mass audience. Introduced in March 2007, the new look delivers less visual clutter for a cleaner, streamlined appearance. There is lots of clear "white" space, fewer, more eye-catching images, and interesting text formats.
MediaPost go on to note similar declines at Newsweek and US News/Report. On the flip side, The Economist inproved their numbers significantly with total circ up 12%. Time is a long way from closing down, but in my predictions for 2008 I did note that we will see some high profile magazines shut down. I think these numbers reflect wider changes in consumption patterns. (And no its not about people reading less).

Borders' Concept Store Opens

Short of visiting Ann Arbor to look over the store myself the nice people at Ann Arbor News got to preview the store opening yesterday and have written a detailed review. I hope to get out there myself in the next few months in the meantime here are some notable items from the AA News article:

The store, in the Waters Place plaza near Kohl's in Pittsfield Township, is the first of 14 concept stores the struggling retailer will open this year. Borders is striving to restructure and brand itself as a center for "knowledge and entertainment," increase sales and differentiate its 520 U.S. stores from its chief rival, Barnes & Noble

The music section has been downsized, and in its place is Borders' digital center. The circular, oversized kiosk features several computer stations where customers can burn music CDs, download music and audiobooks onto MP3 players, create digital photo albums, learn how to self-publish and research family genealogy.

Jones said the amount of floor space dedicated to books has remained consistent in the new store, but the company decreased the number of titles it offers to make better use of space. Now, Borders stacks more books so the cover, rather than the spine, faces the customer. The new Borders also sells some digital cameras, memory cards, and more toys and gift items. Still, the selection doesn't overwhelm the main attraction - books.

There is a video in the article as well.

It might be more interesting to see how this concept store evovles as they get direct feedback from consumers. Borders' deserve credit for expanding the idea of what a bookstore is; how their ideas resonate with book buyers is obviously the point of the concept. My only negative comment is that they get points off for utilizing The Long Pen autographing system: taking autographing to the network level just eliminates all the fun.

Wednesday, February 13, 2008

Shocking Result: Borders Australia Sale Approved

Despite the suggestion that the consolidation of Borders and Angus & Robertson's would lead to higher prices the Australian Competition Commission will allow the sale of Borders stores to Pacific Equity Partners. The resulting combination will be considerably larger in number of outlets than Dymocks which is the only other national chain.

A&R is likely to reassess their entire chain and perhaps close some of the non-performing stores. They may also look to consolidate more retail traffic by opening larger Border's branded superstores in both urban and suburman locations. Thus far, PEP has not indicated how they will present the two brands (and Whitcouls in New Zealand) but it is probable that PEP will operate two types of stores similar to a B Dalton/B&N arrangement. Many of the existing A&R retail outlets I have been in are somewhat down-market and some look more like discount retailers than full service book retailers. Look for PEP to expand and accelerate the opening of larger Borders stores and consolidate some of the A&R business.

No official word on the price but it is estimated to exceed A$120mm. Whether this is a good number from Border's US perspective remains to be seen given the amount they have invested in the international operations.

Dymocks will also be forced to make some changes; however, their ability to do so across the entire range of stores is complicated due to franchising. With half the chain owner managed Dymocks have traditionally had difficulty (and resistance) pushing out corporate mandated initiatives. Regardless, the existence of a well funded, large and well branded competitor may help galvanize the Dymocks faithful. Dymocks could also embark on their own superstore expansion although where they would get the funding for this is anyone's guess.

The Age

Monday, February 11, 2008

NetGalley and Publisher's Weekly Launch eMarketing Platform

Publishers Weekly officially announced a partnership with Rosetta Solutions, Inc. to implement netGalley, an innovative online application. The platform is designed to help publishers better connect with both traditional and new media communities through electronic distribution and tracking of galleys, press materials, title metadata, and promotional plans. PW will use the netGalley application to capture information at the point of submission of Galleys for their reviews process. One of the key benefits of netGalley to participating publishers will be the ability to upload vital book and promotional information that will enable multiple and varied use by channel partners.

I profiled NetGalley several months ago (link).

The Bulletin: Death of a Magazine

As a newsie, I used to carry the The Bulletin on my route every week. I never understood why it came out on Wednesday; even Women's Weekly came out at the beginning of the week, but therein lay some of the failed logic that evidenced the slow and eventually rapid death of The Bulletin. Most will never have heard of this "newspaper" but it was iconic in Australia. Read as ardently in the clubs of Melbourne as it was on the station in Walla Walla, it represented the voice of Australia - both good and quite bad.

As an isolationist, white Australia and republican voice, the newspaper, established in 1880, tried hard to be confrontational and controversial. At the same time, the "Bushman's Bible” published some of the best Australia had to offer from poets, writers and journalists. They included Henry Lawson (known by every Australian school child), Breaker Morant, Banjo Patterson (Waltzing Matilda) and Miles Franklin (now the name of the leading Australian literary prize).

During the early 20th century the newspaper moderated its' views but even when it was purchased by Sir Frank Packer in 1961, he had to remove the 'Australia for the white man' from the masthead. Packer and his son Kerry built a large, influential media empire that included newspapers, television and eventually gambling. The Bulletin was always a 'trophy' property within the empire ensuring the eventual demise.

Kerry Packer's directive to his serial editorial hires, was to "make 'em talk about it." It wasn't about making money and it wasn't - eventually - about transitioning to the Internet. When any business (in this case a publication) is protected from financial reality, what motivation exists for innovation and logical strategic planning? On the death of his father, James Packer inherited the business in December 2005 and he took the long view that his fortune lay in gambling. He sold the media business to private equity and in their review of operations they shut The Bulletin several weeks ago.

The Bulletin still garner's 50,000+ weekly readers and it is hard to believe someone couldn't make a go of it at this level. The Economist only gets 20,000 in Australia and has launched a (reputed) A$500K marketing program to convert old Bulletin readers. While it is a always sad to see a media 'institution' go under, in this case it was inevitable. There hasn't been too much interest in resurrecting the newspaper from any third party and perhaps the investment required to digitize their content and production processes is too much. The real crime is the loss Australia faces from both the voice of The Bulletin and the potential to farm the content for future generations. Had The Bulletin been owned by a commercial publisher during the mid-1990s then the future may have been quite different.

Random House to Sell Chapters

The WSJ (via Reuters) is reporting that Random House will begin experimenting with the sale of chapters from their web site. The report suggests this is not a wholesale effort merely that they will "test selling individual chapters of a popular book to gauge reader demand." From the Journal:
Random House Publishing Group's experiment appears to be the first time a major consumer publisher has offered a title on a chapter-by-chapter basis. It will sell the six chapters and epilogue of "Made to Stick: Why Some Ideas Survive and Others Die" for $2.99 each.

I am pretty sure that's an incorrect statement - for example. No matter, the point is publishers are rapidly experimenting with new ways to reach out to consumers.

Harpercollins Launches Free Content

The NYTimes reports that Harpercollins will begin a marketing experiment by placing the full text of selected new titles on their web site. From the article:
Starting Monday, readers who log on to will be able to see the entire contents of “The Witch of Portobello” by Mr. Coelho; “Mission: Cook! My Life, My Recipes and Making the Impossible Easy” by Mr. Irvine; “I Dream in Blue: Life, Death and the New York Giants” by Roger Director; “The Undecided Voter’s Guide to the Next President: Who the Candidates Are, Where They Come from and How You Can Choose” by Mark Halperin; and “Warriors: Into the Wild” the first volume in a children’s series by Erin Hunter.
As the article notes, consumers interested in purchasing the titles will be able to do so via existing online retailers. Currently, this is not designed to be a storefront for Harpercollins but does represent a continuation of their web-based marketing and promtion efforts.

Sunday, February 10, 2008

What Circulates In England

The UK public libraries let us know what their users read the most. The TimesOnline relates a report on the top circulating titles in UK public libraries:
Figures published today for the year up to last June offer a fascinating glimpse into the nation’s reading habits. Patterson’s novels, which have sold more than 130 million copies worldwide, were borrowed from libraries more than 1.5 million times. A former advertising executive, he began writing in his spare time and he has published almost 50 novels. He now produces up to eight books each year with the help a team of co-writers. In third place was the children’s writer Daisy Meadows. The name is in fact a pseudonym used by a collection of writers, including Sue Bentley and Sue Mongredien, whose seemingly endless sequence of Rainbow Magic fairy books have risen from 26th place the previous year.

Proves that the author brand is most powerful and developing more author brands whether related to authors that exist or not should be more of a focus. I've mentioned this before (Brands to Publish).

Zadie Disqualifies the Awards

TimesOnline reports Zadie Smith has suggested that literary awards have become prostituted to commercial interests. Surely, this is not news? Haven't the arts always been subject to commercial bias? Haven't the arts always maintained an uneasy alliance with the money that supports them and an inherent 'obligation'? Too deep for me, but the criticism of her comments concentrates on her, "I’d also like to know if her publisher is going to put her forward in future for literary awards" sniffs one, rather than on the larger point of both the extant quality of writing today and the relevance the awards have for the book buying public. Both issues seem to be immaterial to the notion that Zadie Smith is an ungrateful swine.

The whole tempest in galley seems to have erupted due to the frustration at being unable to present an award.
The three-person Willesden Herald panel between them read all 850 entries and then drew up a list of 20, which were sent to Smith. She and her fellow judges decided that this year they could not find “the greatness” that they were looking for and so decided not to award the £5,000 prize, which had been raised privately by Moran
Smith then voiced said frustration on the newspapers' blog site:
No entry was good enough, Smith declared - before going on to savage more famous literary awards, such as the ones she has won, for doling out prizes for commercial imperatives. The blog under her name declares that she is “depressed by the cookie-cutter process of contemporary publishing”.
Awards do have a function; however, we are seeing more and more discussion about how important they are to the general public (not really) versus the publishing community (Big, Big Big). This topic maybe this year's book reviews angst.

Friday, February 08, 2008

Innovation in Publishing

BISG and The Idea Logical Company have started what we think is a very exciting project, which will culminate in the program for Making Information Pay on May 9. We are trying to understand the nature and impact of "experimentation and innovation" in publishing in the digital age—both in attitudes and in practice.

As part of the project we want to collect data via a broad survey on what is now taking place in terms of experimentation and innovation. Using information obtained in the survey, we will then research and write up 8-10 case histories – accounts of experiments that have been tried, whether or not they were deemed to have "succeeded". The findings will be presented at the event on May 9.

We would like your help with this project by completing the survey.

The survey is now open and is available on Survey Monkey for voluntary participation, which we hope will be widespread, at your company and all others. To take the survey, please use the following link:

The link in this email will work ONCE. The survey, which should take you about 10 minutes to complete, closes on February 21. Please note that the information obtained in the survey will be treated confidentially and no individual responses will be divulged.

We also hope to see you at Making Information Pay in New York City on May 9. Please register for the event at

Thank you in advance for your help with the survey.

Best wishes.


Michael Healy
Executive Director
Book Industry Study Group.

Telephone: 646 336 7141.

Hachette Reports

Lagardère the French conglomerate that owns the book publishing unit Hachette published their full year results yesterday. They reported group revenues up 8.5% over the prior year and 3.3% up on an apples to apples basis. The wide disparity was due to the full year inclusion of the Time Warner Publishing Group (now Grand Central) in the current year's numbers. This is a widely dispersed conglomerate but the news report did carve out the publishing unit for praise as follows:

Publishing (formerly the Books division) – Excellent quarter in virtually all the countries in which we operate. Sales were particularly robust in the United Kingdom, driven by a raft of successful fiction and non-fiction titles. The very strong growth in the United States since January 2007 was maintained. In France, Literature and Illustrated Books both ended the year strongly.

For the full year they reported the following:

Revenues reached €2,130m (up 8.6% on a reported basis), including an extra quarter of sales from the Time Warner Book Group (impact: €80m), which in 2006 was consolidated from April 1.On a like-for-like basis, an excellent final quarter propelled full-year revenue growth to 4.7%, versus 3.0% to end September 2007.In the United Kingdom, the year ended with a surge in sales. The group published 7 of the top 10 Christmas non-fiction best-sellers (including Bobby Charlton, Russell Brand and Al Murray), and 5 of the top 10 fiction titles (including Martina Cole and Patricia Cornwell).In the United States, the strong growth seen since the start of the year continued, driven by best-sellers (including Patterson, Baldacci, Hitchens and Meyer) and healthy backlist sales. In France, the fourth quarter was boosted by a fine contribution from Literature, thanks to authors such as Simone Veil and Philippe Claudel. Illustrated Books also enjoyed solid year-end sales.In Spain, sales are traditionally sluggish in the final quarter. Over 2007 as a whole, Spain recorded further strong growth not only in Education, but also in General Publishing and Children’s Books.Finally, Part-Works ended the year well, with steady sales growth in Italy, the United Kingdom and Japan.

In related French publishing news, France's number two publisher Editis has been placed on the block by its private equity owner Wendel. (Reuters) The company is said to be worth approximately €900mm. Spanish publisher Planeta and Italy's Mondadori were immediately suggested as potential purchasers. The following is from their corporate web page:

With 2400 employees and about 40 publishing imprints, Editis holds leading positions in three segments of the publishing business, in particular Literature (trade and mass market formats), Education (scholarly, scholastic aids, middle school, high school, university, legal and medical), and Reference (dictionaries and encyclopedias), as well as in the field of publishing services (promotion and distribution). Prestigious publishers and efficient group-wide services have made Editis number two in the world of French publishing and a major player in Europe. Editis has a clearly stated objective: to strengthen its position on the French market, to continue its growth, and to expand its influence throughout the French-speaking world.

I have noted Editis once before. On their web site they offer their take on the future of the book/reading experience. It is in French but none the less interesting. Here.

Wednesday, February 06, 2008

TV Guide

There is a dearth of deep bibliographic information available on television programs. Some information is collected by TV Guide as part of its programming but they haven't databased the full history of broadcast TV and as more and more TV programming is available for sale and download the requirements for deeper bibliographic details here increase. It is a business opportunity for someone who likes television. With the data that TV Guide does have, it has never appeared interested in becoming a database provider - in addition to publisher of the magazine. Opening up their database via data sales, widgets/asp, services etc. would seem to me to be an imperative given the rapid decline in the fortunes of the magazine. The company struggled mightily with the development of their online presence and they still have not been successful creating a portal or destination site for television fans.

That said Gemstar/TV Guide is in the process of being acquired for well over $2billion. The company purchasing Gemstar is Macrovision and not an obvious acquirer.
Macrovision offers content protection, digital rights management, and software licensing solutions that enable businesses to maximize the value of their digital content and software products. Our solutions are deployed by companies in the entertainment, consumer electronics, gaming, software, information publishing and corporate IT markets to solve industry-specific challenges.
They are not a database or information management company, but they do (I think) realize that use of bibliographic information in the businesses they own could be an advantage.

It doesn't appear however, that they couldn't achieve the same advantage by licensing the data rather than paying over $2bill for a company which not only is a debatable fit with Macrovision but has its own questionable history of business execution and business strategy. Since the announcement of the purchase Macrovision shares have fallen significantly (although so has the market as we all know) as have shares in Gemstar. Shareholders of Macrovision are not excited about this deal and there is some potential that the deal will get derailed. At the least, it seems the deal should get revalued and pressure for this should become more acute when Gemstar release their latest quarterly results in mid February.

More from Mediapost.

Tuesday, February 05, 2008

Harpercollins Rebounds

After a slow start to fiscal 2008, Harpercollins seems to have rebounded and reports sales up moderately from $393mm to $406mm for the quarter. Operating profit improves nicely up $13mm to $67mm.

As quoted in Publisher's Weekly, Jane Friedman noted
"I’m very happy about the recovery this quarter. I thought it would happen, but until it does you hold your breath.” She also noted that the improvement was driven by what Friedman called the “three Ds,” The Daring Book for Girls, The Dangerous Books for Boys and Deceptively Delicious. The three titles are continuing to sell well into the third quarter, and Friedman said the titles should become strong backlist works.
From the Newscorp Press release:
HarperCollins reported second quarter operating income of $67 million, an increase of $13 million versus the same period a year ago, which included charges due to the bankruptcy filing of a major distributor. The 24% growth included strong sales of The Daring Book for Girls by Andrea J. Buchanan and Miriam Peskowitz, The Dangerous Book for Boys by Conn and Hal Iggulden and Deceptively Delicious by Jessica Seinfeld. During the quarter, HarperCollins had 40 books on The New York Times bestseller list, including 5 titles that reached the #1 spot.
Given the slow first quarter, HC remain short of its prior year sales and operating income numbers. No mention of HC on the earnings call with Newscorp management which is true to form.

Monday, February 04, 2008

New York Times

Marc Andreessen writes on the 'deathwatch' of the New York Times. It isn't much more than most of us will have heard about as the company released their latest financial reports; however, the review of the current board membership is a bit of an eye opener.

On another note, I have commented on The Times a number of times (link below). Currently, I only purchase the Sunday print version. Generally as I sit reading with the TV on, their ad comes on selling subscriptions to the print. It happens with regularity, and yet as you might watch a slow moving train approach a cliff, I always seem to watch and listen. As their subs and newsstand sales fall off a cliff there is almost no indication to the wider world that this company has an online strategy. The thinking seems to be if they promote the website, or even the Times Reader that will accelerate the migration away from print and so they are prohibited. Most other information companies try to accelerate the migration but then these companies have figared out a new revenue model which NYTimes hasn't.

But really, these ads are horrible and exemplify better than anything else their lack of understanding of the new media landscape. Print ads on TV, what could be worse when you should be an internet company?

Sunday, February 03, 2008


I don't profess to be much of a football fan, but that was some game. In a strange way the last drive had the air of inevitability....Now for the ticker tape parade and it won't be in the parking lot at Giants stadium either.

Friday, February 01, 2008

Google Search By Year

I came across this a few weeks ago and I thought it was very interesting. Google has place where you can see some of their experimentation with new search interfaces. In the Google search box enter the following: joseph conrad view:timeline and you will see a dateline version of the life of Joseph Conrad. It works for all kinds of things: Try replacing JC with Viet Nam War. If you play with this a little you will see that you can narrow down searches within years. As far as I can tell it doesn't do months.

Some of you will recall an interface that OCLC has worked on for authors that is similar. WorldCat Identities looks like this: Conrad

Fellow traveler, Peter Brantley reminded me of the Google interface by referring me to an article in In this post they look at six of the experimental interfaces.

PS. Within three clicks on the Google I was reading a review/appreciation of The Red Badge of Courage written by Conrad himself. Again, yet another reason to want to be be a high school student today.

Microsoft to Buy Yahoo for $44Billion

The dam has finally busted. Will Microsoft be able to pull off the deal to buy Yahoo and then, more importantly will they be able to make a success of the integration. This could be one of the most exciting news stories of the year. Will this be welcomed by Yahoo? Is this the big deal that Terry Semel was said to be working on only yesterday? Could Yahoo look for some other combination - with Ebay - and act defensively to stop the acquisition? The current offer is very expensive - 60% over the closing share price yesterday.