New Rules on Out of Print

Fast on the heels of their epistle on the business of publishing, The New York Times tells us about how new fangled on-demand printing is complicating the publishers' definitiion of 'out of print'. Here we hear of Simon & Schuster who are changing their contracts to accomodate this radically new technology. You be the judge;

But with the advent of technologies like print-on-demand, publishers have been able to reduce the number of back copies that they keep in warehouses. Simon & Schuster, which until now has required that a book sell a minimum number of copies through print-on-demand technology to be deemed in print, has removed that lower limit in its new contract. In effect, that means that as long as a consumer can order a book through a print-on-demand vendor, that book is still deemed in print, no matter how few copies it sells.

The unfortunate thing may be that the authors that sell less than an initial 1000 units may still be tied to a publisher for a very long time dispite the changes made to author contracts. Some of these authors would be better served by self-publishing their titles - perhaps a story for another day. As far as 'established' authors that regain their rights, companies such as iUniverse.com have offered 'back in print' programs with the Authors Guild for over 8 years now.

Customer Focused Publishing And Thomas Nelson

Some of you will recall that Thomas Nelson announced last year that they were doing away with the general publishing convention of creating all kinds of imprints for all kinds of reasons. Nelson has reverted to subject classifications as an inherently simple and commpn sense approach to selling their titles. Here he offers a status report on the situation and I love the following quote:

I don’t think any of us realized how much energy and money we were spending to maintain an organizational and branding infrastructure that added zero value to our customers. It’s one of those chronic situations that develop in organizations where you stop feeling the pain and just learn to cope. Then, when it’s gone, you suddenly notice how much better you feel. In my opinion, imprints add very little value and lots of complexity.

Mike has been kind enough to join me in a panel discussion at Bookexpo and while our subject will not be on this topic he has his own presentation where he is planning to review this activity.

The two seminars are:

Thursday May 31, 1:00 - 2:00
Customer Focused Publishing: How TN moved Away from Imprints - Room 1E02

Thursday May 31, 2:30 - 3:30
Corporate Social Media Platforms: A Case for Publisher Participation - Room 1E04

See you there.

Apax Appoints Shaffer Exec Chairman and Dunn CEO of Thomson Learning

I could have titled this Groundhog day since there was a rumour going around yesterday about Dave Shaffer returning to Thomson and today it was confirmed. More interesting was the appointment of Ron Dunn as CEO to replace the incumbent Ron Schlosser. On completion of the deal last week, Schlosser's internal memo to staff wasn’t particularly inspiring – more stay the course – than anything, and I guess he knew what was coming. Dunn’s departure from Thomson Learning at the end of 2006 was always a mystery to me since he had been a tireless worker for the business and had been a major factor in the growth of the education business particularly internationally. It will not be the first time Shaffer and Dunn have teamed up and they know each other very well having worked together at Thomson, Macmillan and McGraw Hill. From the press release:

Jackie Reses, Partner at Apax Partners, said: "The Thomson Learning properties
are unique, global media franchises that hold strong positions in their respective markets and have delivered stable and predictable growth. We look forward to working in close partnership with Ron Dunn and Dave Shaffer, two proven media executives who are intimately familiar with the Thomson Learning businesses. Ron and Dave are extremely well suited to lead the newly independent Thomson Learning organization as it builds on its positions within its individual market segments, continues to expand internationally, and captures the enormous potential we believe exists in the evolution to digital content distribution in
post-secondary education."

Both executives will have their work cut out for them, since as I have commented before the Thomson Learning company while possessing significant assets has been left in the dust by Pearson. Pearson has led in growth rate, operating performance and strategic acquisitions over the past three years. Coupled with the importance in migrating content to the web which Pearson has also started to do well with and there will be challenges a plenty. Each of these executives know this business and industry well so they should not be short of ideas or action plans to make the necessary changes.

It should be said also that this will be somewhat a vindication for Ron Dunn in returning to Thomson. I understand that Shaffer was none too pleased with Harringtons decision to part ways with Dunn in 2006.

Dugan Appointed Head of Entertainment Rights North America

Deborah Dugan, who was head of Disney Publishing Worldwide (not Hyperion), has been named CEO/President of Entertainment Rights North America. From AWN :

At Entertainment Rights, Dugan will have overall responsibility for the day-to-day running of the U.S. operations (including Canada), which encompasses Entertainment Rights U.S., Classic Media and Big Idea. Dugan's main role will focus on further building and maximizing the revenue streams for the group's entire brand portfolio across TV, licensing & merchandising, DVD/video and digital & music. Dugan will also work closely with the group's executive management team based in London to formulate the strategic direction of the business as well as exploiting new business development opportunities ensuring the company maintains its leading position.

In a related story, the Disney unit Dugan ran announced today it is moving to Westchester.

Amazon To Launch DRM Free Music Store

The days of DRM protected music are definitely numbered. Amazon.com is announcing that they will launch a DRM free music store later this year which will include thousands of songs in MP3 format. As such these files will be playable on virtually any music player.

“Our MP3-only strategy means all the music that customers buy on Amazon is always DRM-free and plays on any device,” said Jeff Bezos, Amazon.com founder and CEO. “We’re excited to have EMI joining us in this effort and look forward to offering our customers MP3s from amazing artists like Coldplay, Norah Jones and Joss Stone.”

Some pundits have started to suggest this is an Apple I-Tunes killer but what is more likely is for Apple to renegotiate their music deals (where applicable) and come out with a similar service before Amazon.com launches their site. Since Apple are very much the incumbent music download and hardware vendor they have a distinct advantage. (Not to mention the potential impact of the Apple I-Phone). It should be pointed out that sales at the Apple store have never been huge but a change in the DRM rules could be the catalyst that Apple and Steve Jobs have been looking for.

No word on pricing or specific launch dates from Amazon.com

Press Release

Thomson - Reuters Deal Done

CEO Harrington has piloted the company from reliance on newspapers and print based businesses to one dependent on electronically delivered information products. He will retire having completed a remarkable transformation in the Thomson businesses and will present Tom Glocer with the opportunity to chart the next chapter in Thomson's corporate history.

Reports:
BBC
Reuters
Global & Mail
NYTimes
The Times

Reflections on the IDPF & BISG Conferences

Reflecting on last week’s conferences it was interesting to recall that Michael Healy was a little concerned that scheduling the IDEP annual meeting the day before the BISG sponsored Making Information Pay would limit the participation at the latter. As it turned out, anyone who attended both meetings benefited from the combination of themes and the opportunities to network. At IDEP the attention (glamour) was on handheld e-readers as it was last year. In fact there was some redundancy versus last year; however, it was a European presentation of a combo device that seems to offer the best answer to my big gripe, why a dedicated device?

Later in the day we heard from content providers, content distributors and content users all of which supported the BISG meeting the following day. Perhaps the most troubling news came at days end when the Associated Press reported that no one under 50 saw print newspapers as their primary source of news and that the average user spent less that one minute per day with online newspapers (including nytimes.com). It was noted that CNN did a far better job than other news sources because their content was more open, included more video and limited dead end pages which further encouraged interaction with content.

Sitting in the bleachers it is easy to toss stones at what we heard publishers are doing in an online world. The most troubling thing seems to be that we still don't really know what we should, could or will offer our customers in the online world. One e-content presenter proudly noted 'price' as the key driver of purchase behavior by their customers. Customers driven by price are flirtatious and flighty and will always be on the look out for a better deal. This statistic seems to indicate no engagement in the content at all by the customer, which is troubling given all the opportunity for interaction that e-content and e-delivery can afford.

The early morning presentation from Hachette on the state of e-publishing and the reasons for getting stuck in was devoid of relevancy. The same presentation could have been delivered three years ago when it would have been viewed with interest. Universally missing is the vision of what published content will look like (and represent) in 5 or 10 years time. We are all guilty of using the e-book term and I have to believe we are in an evolutionary phase that will lead to some new species that we can't quite as yet see. Not 'e' nor 'book' perhaps? Aside from Google, the best e-publishing initiatives underway are promotion and marketing driven. This is not a criticsm because what Random House and Harpercollins are doing to use the internet, their data warehouses of content, widgets and other things are important steps towards closer interaction between the content producer and the customers. At the moment these are not so much content plays as marketing and promotion activities.

In retrospect, the panel discussions could have benefited from some of the work that the Future of the Book has done to show publishers their experimentation with content creation and display/interaction. This work is hugely interesting but possibly unknown to the majority of publishers. Admittedly the BISG focus was on Making Information Pay but the speakers tended to exceed the bounds of this title. Some extrapolation regarding where they thought publishing may go and some of the experiments underway would have been interesting.

In a way it was almost predictable that industry badboy O'Reilly Media made an indelible mark as the capstone on the meeting. Tim O'Reilly is hosting a Tools of Change conference on the future of publishing in San Jose next month and has stated that while most publishers are in New York all the e-publishing action is in California so that's why the conference is out there.

Granted, he may be less politic but in a basically canned presentation, Allan Noren from O'Reilly was able to forcefully emphasize the distance O'Reilly have traveled down the e-publishing road. Even a simple statistic drew instant reaction from the audience regarding the increase in international sales as a result of placing a pdf download button on the purchase page. The other presentations drew interest but not an immediate reaction like this one. O'Reilly has also led in the atomization of their content and seems to take pride in how they continue to push the envelope. The company recently added pdf downloads, read on-line, chapters and a permissions link. All represent evolutionary changes, but Noren coached the audience to digitize, make content ubiquitous and reduce the barriers to purchase.

Noren's parting comment was to approach e-content and e-retailing like a beginner because as such we have no preconceived notions of how things should be. We can innovate, adapt, change and innovate again without jealousy. This thought seems to support the notion that we must eradicate the conjunctive 'e-book' - but with what? - and create some new species of 'book'.

As I mulled over the content of the conferences last week, the thought that Ulysses (Joyce) was in many ways the first multimedia book. Sure it is printed on paper, but think about how the mind of Bloom represents an integration of audio, video, and text making Dublin come alive for the reader. What a fascinating project it would be to lend real life to the Newspaper headlines, the trolley cars and even the sounds of Dedalus peeing on the beach. Joyce approached authorship like a beginner; hopefully the next person to do so won't get banned.

BISG Conference Presentations
IDPF Presentations

Reed Looks to Profit From Thomson Learning Multiple

The multiple paid for Thomson Learning was astounding given the general view the business unit would sell for almost $2.0Billion less. Not surprising, Reed Elsevier are as gobsmacked as all of us but think that they can generate something of the same multiple for their learning unit. The comparisons are not exact between the two units however one thing is similar; that both represent unique moments to buy leading players in their segment and it is unlikely that a similar combination of assets will come up for sale within the next five years or so. Here is The Independent:

The analyst Simon Wallis believes valuing Reed's total discounted cash flow
on a multiple of 6 times pre-tax earnings, a typical private equity buyout
valuation, gives the shares a potential value of 930p. The Swiss bank UBS also
believes there is more upside in Reed, giving the stock a more modest 740p price
target. Shares in Reed firmed 3p at 666p while the rivalPearson rallied 17.5p to
908p on news that it has acquired the online learning group eCollege for
$477m.

Reed has already sold some of the Harcourt assets to Pearson but the rump educational business remains and likely will exceed earlier expectations on price.

Informa Buys Datamonitor

According to sources, Informa approached Datamonitor several months ago about acquiring the company and discussions resulted in the sale of the company. Datamonitor CEO Mike Danson is expected to receive over £60million as his share of Datamonitor. The total purchase price is £502million which is close to the current market cap but represents over 27x next years expected income. A high multiple indeed; however it should be expected that this company will fit well with the current Informa products and that some significant economies are anticipated once the product lines are combined. From The Telegraph,

According to Informa, the purchase represents an "attractive opportunity" that fits with its strategy of supplying specialist content to a business audience. David Gilbertson, managing director of Informa, said: "Datamonitor is a model example of a company that slots neatly into the Informa group. Both companies provide business customers with data and analysis that is essential and unique - information they cannot do without."

January 2007 Google Unbound Conference

Here is a presentation from the Google Unbound panels and presentations from earlier this year.

Transcript

Pearson Buy E-College

On the back of last weeks purchase of some of the Harcourt learning assets that seemed to take many in the industry by surprise, Pearson announced today that they have agreed to acquire E-College an online education provider. (Reuters) The company's product suite fits well with the acquisition strategy laid out by Pearson early last year that has seen the acquisition of PowerSchool, Chancery Software and the Harcourt assets.

Founded in 1996, eCollege provides a range of on-demand software services including course management, virtual campuses, and assessment, reporting and retention monitoring tools. The company, which supports around 180 institutions, with student enrollments of 1.2 million in 2006, generated sales of $52 million and operating profit of $22 million last year.

Shares of the stock went up 6% on news of the deal.

Increasing Traffic and New Authors for Personanondata

The past four months have seen a rapid rise in the traffic to Personanondata for which I am very grateful to the readers who have found me and stayed with me. I have also benefitted from multiple links from a variety of blogs and websites which have raised awareness and interest. Significantly, I have also seen some links from industry leading trades such as Mediabistro/Galleycat, Publishers Lunch, Library Journal and Book Business Magazine and these links have served to endorse some of what I have published.

But it is not enough (for me), and I would like to encourage all my readers to tell people about the site and hopefully build some discussion around some of the themes I talk about. (I have exhausted my contacts and don't wish to bother them too frequently).

I am also interesting in publishing material from other people in the industry with a point of view. Over the past three months I have published articles by Andrew Grabois, John Dupuis, Michael Healy and Michael Holdsworth. All have been well read on the site and I hope they will all return at some point but I would also like to include more perspectives. Along those lines if anyone is interested in blogging about sessions at BookExpo in a few weeks please let me know.

Thanks for the support.

Weekly Update: May 13th

Deals:
Silliness Regarding B&N/Borders Combo: Forbes
Thomson Transformation: Global&Mail
Spring Deals Rekindle M/A Market: Financial Week
Murdoch and Dow Jones: NYTimes

Publishing:
How Publishing Works: NYTimes
Holt on Reviews
News Corp 3Q Results (Harpercollins): Yahoo
Perseus Reorganization: PW
Wolters Kluwer 1Q Results: Webwire
EBrary Expands Publisher List Including ABC-Clio: Businesswire
Bloomsbury and Libre Digital: OhMyNews
Publishing Books On Line: The Times

Other News;
LOL Borders News: Businessweek
Launch of Amazon Author PodCasts: Businesswire
FT Reports Content Piracy Far Lower Than Estimated: FT LawGeek
Too Many Books? Design Observer Blog
Does Chaney Own an I-Pod? M&C
McCartney Goes Digital and The Beatles to Follow: Billboard
Review of IRex Illiad e-Reader: Guardian
Reflections On The Relationship Between Libraries and Publishers: Brantley

Colbert & Rushdie Spar Over Book Reviews

Listen up nation, as some of you will remember I commented on what I thought of this pandemic of flagellation over the fate of the nations big city newspaper book review sections. Perhaps the concern ascribed to their obvious fate cuts some of us too close to the bone as we watch a print based media struggle with extinction but nevertheless the ensuing discussion about publishers not supporting the sections and perhaps readers not reading anyway continues to miss two main points.

Firstly, newspapers are simply not the best method of promoting books. It maybe they were never that great but for a long period of time they (and magazines) were the best outlet available. Word of mouth, which derives from publicity, not advertising which is message and awareness based has always been the most effective method of influencing sales. Witness the amazon 'reviews' sections and the ranks ascribed to reviews which 'helped' in confirming the book choice. In contrast, the web supports book reviewing and book promotion in ways print based newspapers and magazines can never achieve. As I commented in my original post, the ability to interlace supporting content around a central essay linking directly to sections of the book discussed, enabling direct author involvement and allowing readers, fans and critics to add content results in a valuable package or 'body of work' about the book. Here is the opportunity to make exploring reading more interesting but it is not an argument seen in any of the discussions over the past few weeks. For the most part the conversation has been one long lament.

Last December, Genevieve Tucker in The Australian newspaper anticipated some of the discussion around the reviews issue and eloquently discussed the issues and opportunities that the web offers book lovers. The following is representative of her article and is her conclusion.

Indyk may not consider his republic of letters has come to stay just yet, but many book bloggers would heartily endorse the words at the end of his 1997 essay and see them as a warning to those who would encroach upon their independence in he name of the marketplace: "It is in the conversation about literature, the recommendation and the debate, that the literary community really exists. It is here that reputations take root, and word of mouth, that mysterious and voluntary power that can sell more books than a fortune spent in advertising, has its source. To insulate authors from this realm, as has been the practice, is to guard them from the kind of challenge that is a spur to creativity. If you try to tamper with the conversation of criticism, if you restrict it in order to take all the space you can for hype, if in the end you silence it altogether, not only do you drive away readers, but you place a fatal limitation on authors as well.'

Secondly, there is a cultural snobbery that pervades best summed up in this comment by the author Richard Ford in the New York Times:

“Newspapers, by having institutional backing, have a responsible relationship not only to their publisher but to their readership,” Mr. Ford said, “in a way that some guy sitting in his basement in Terre Haute maybe doesn’t.”

Times they are a changing, and it is no longer the case that iconic media properties like the NY Times, LA Times and Atlanta Journal Constitution are the only outlets for legitimate cultural criticism. There are scores of highly regarded book reviewers with loads of web traffic producing critical analysis and support for the book industry. The publishing industry should be supporting these bloggers and website owners rather than waste time supporting a medium that hasn't adapted. Efforts by Random House and Harpercollins (others will follow) to make it easier to incorporate their content onto blog and web sites will only exaggerate the gap between the print based media reviewers and the guys (and girls) sitting in their Terre Haute basements. As they close down or reduce their expenses devoted to book reviews sections, the newspaper companies should be looking at acquiring some of these web sites and bloggers and build on the communities that these people have successfully established. That is if they are really committed to books.

I will try not to address this subject again but here is Salman Rushdie and Stephen Colbert on book reviews. I disagree entirely with Mr Rushdie:





PS: If you didn't catch the piece with Jane Fonda on the same show later that night, it is very funny.

More on Reviews:
Lynn Scanlon
Pat Holt

Thomson Agrees Sale of Learning Unit for $7.8Bill

It is hard to fathom this price. Bids and intentions were due last Wednesday and I thought I would have some time to comment on the status of the sale, but clearly the size of this offer required no deliberation. (Other than confirmation that it was what it was). Just as industry followers found it hard to explain the Riverdeep/Houghton Mifflin deal this one raises many eyebrows in the industry for the multiple paid for the business.

It was approximately 1o months ago that Richard Harrington causually mentioned to the FT that they would consider selling the Learning unit. By October the divesture was confirmed and the sale process started once the final year end numbers were finalized. Any observer of the manner in which Thomson spoke and presented its business would have seen strong indications that Learning did not feature in their plans. The detail and excitment given over to Thomson Financial during the analysts calls was indication enough. Speculation suggested that a price between $5.5 and $6.0billion would be good news for Thomson. As it turns out, Thomson management has kept one step ahead of everyone with some suggesting that the recently announced merger with Reuters has been in the works for two years and their post merger plans indicate that the merger with Reuters has indeed been long in the planning. The extra billion they are getting for Learning will really help out the Reuters deal which looks increasingly cheap.

The consortium includes Apax partners and a Canadian Pension fund name the Ontario Municipal Employees Retirement Service. Apax has invested in other educational properties before but not to this extent. Thomson CEO Harrington has suggested that financially the Learning business was sound - although performance did not match that of Pearson - but they were frustrated at the slow pace of migration to on-line products. This deal could be viewed as an endorsement of the Thomson Learning management and I wouldn't expect significant changes at the higher levels. If anything, management will be given a freer reign to excellerate their online and electronic product offerings.

The transition to the close of the deal is expected to take 60 days and the company is understood to have plans in place to speed this process. The company also expects to re-name/brand itself by the end of the year.

It will be very interesting to see how this sale multiple impacts the other crop of publishing assets that are for sale.

Reuters

Live Academic: Crank Up The Volume

Few publishers would limit themselves to selling or distributing through one outlet when there were multiple routes to customers on offer at zero incremental cost. Microsoft, as the second guest to the party, recognizes this and is at pains to present that they will accept digital files from publishers or scan titles in a manner that creates no additional costs to publishers.

With their nascent book program, Microsoft – the big bully of yore - is defined relative to the incumbent but doesn’t court that comparison to their advantage. Microsoft has attempted a stealth approach in gaining publishers’ attention and cooperation via direct communication and visits and presentations rather than a more aggressive marketing and public relations program. At least that’s my explanation for their rather meek entrée into the digital book space. It will be interesting to see the level of interest in their presentations at BookExpo later this month. If the meeting I attended at London Bookfair is any indication where there were less than 30 people in attendance this could be another missed opportunity for Microsoft.

Microsoft need to court some controversy in order to draw attention to themselves. They also need to exhibit deeper knowledge and understanding of the publishing industry: Both the simple mechanics of the industry and the quixotic issues such as the inter-house struggles over international rights which are particularly relevant with respect to electronic content.

The Microsoft personnel involved in the Live Academic program all need to understand this material rather than just the front man. Google also took a long time to learn this lesson believing that their people were so smart they could fake it but this attitude was taken for arrogance and things got off to a bad start. The improvement was evident at London where the 60 min overview presentation of Google Book placed the program in the context of the industry and with the issues the industry faces. A second panel discussion leaned heavily on publisher experiences and Google barely needed to speak to get the positive point across. In contrast, the Microsoft presentation seemed to run out of gas after 15mins or so. The features are impressive but the delivery isn’t emphatic. In answer to a question about upcoming features, Microsoft diverged into a 10min presentation of the NYT e-reader product – interesting - but not on point.

Microsoft Live Search has over 30,000 titles available (once it officially launches) and the titles are displayed in a two pane system. The page layout is functionally more appealing than GBS. Moreover the user is easily able to export segments of highlighted text, link to abstracting and index products and citation services such as bibtext.

Microsoft is also emphasizing that the program is conducted with the full cooperation with publishers: Meaning they are not scanning books where the copyright is ‘in transition’ (in the words of Google). To support this emphasis on the publisher, the company designed what amounts to a publisher platform to manage the content in the Live product. Via this ‘platform’ publishers can set the level of preview rights in three ways: 1) percent viewable, 2) pages forward and back, or 3) contextual snippets. The publisher can also set territorial rights as well – geographic locations – all of which are assignable on a per-book basis. Not foregoing my earlier comment about understanding the industry, Microsoft seems to have recognized that the book is a unit of component parts and have made the permissions process so flexible that the publisher can even set rights for an image or table in a specific book.

The publisher also gets marketing and promotional options that enable branding (logos), promotional programs (links, coupons), commerce applications for ‘buy the book’ activities and links to online retailers. An appreciation of the importance of metadata to discovery also percolates and the company decided to license bibliographic data from a leading source and also capture the book text in multiple ways to ensure the rendition of the book was accurate and that the text was indexed appropriately. Scans are held in hi and low res images and the text is fully indexed and sits ‘behind’ the image. Current OCR technology is not sophisticated enough to replicate complicated page layouts that incorporate call outs, high lighted text, block quotes and the like. All of this gets scrambled via OCR. (The text of the title is captured in reflowable xml).

Microsoft suggest they want consumers to find books in places they wouldn’t ordinarily find them which is in search results and have made the point to publishers that the Microsoft program is another outlet for promotion and perhaps sale of their content. Regardless of the sound of this pleasant and appealing message it is far too quiet and what Microsoft should do is raise the volume. Google is bound to release a version 2.0(beta) of GBS shortly and would look to incorporate some of the best features of Live Academic. What will the message from Microsoft be then? My suggestion is to open up the content and allow web service and api access to the book content (with publisher approval of course). After all, who really wants a second closed content platform comprising similar if not duplicative stuff? Courting ‘controversy’ may be another way of gaining attention but I think that’s what Microsoft Live needs.

Thomson Reuters Update

Some say discussions have been going on for years and some say they only got serious in the past few months but nevertheless Thomson and Reuters have admitted that Thomson will acquire Reuters in an $18billion deal. Strategically important for Thomson in competition with Bloomberg, the deal should pass the requisite government inquiries. Tom Glocer maybe the big winner having been inserted into the CEO role of Reuters when the company's future was far from guaranteed. He will now assume the CEO role of combined entity when Richard Harrington retires when the deal is completed. From the press release:

Under the terms of the proposed deal, Reuters CEO Tom Glocer would become chief executive of a dual-listed group to be called Thomson-Reuters, the companies said in a joint statement.

Thomson will have a slightly higher market share as a result of this deal; however, the developing market is international and the 'pie' is growing larger by the day. Reuters is a far stronger name internationally than 'Thomson financial' or Bloomberg' and from this stand point Thomson will be in a strong position to further leverage the brand internationally as internationally markets grow and develop and thereby need more sophisticated information and workflow products.

Weekly Update

Deal News:
When Opportunity Knocks Pearson Goes Shopping: Harcourt Assessment. Independent Forbes
£8.0 Billion Thomson bid for Reuters: Independent
Discussion of possible Thomson bid for Reuters: Toronto Star The National Post
Private Equity Threeway for EMI: Reuters
Douglas and McIntyre Publishing (Canada) Acquired by PE: PR Web
Riverdeep Refinances: RTE

Publishing:
Lonely Planet Unsure: Seek Investor(s): The Age
Torstar (Harlequin) report improved Results: Global & Mail
PR Newswire to offer Blog Measurement Tool: PRNewswire
Simon & Schuster Doing Well: The Bookstandard

Other News:
Application of FAST search Technology to Newspapers: Reuters
Shareholder Opposition to Murdoch Dow Deal: Reuters

Sports:
Champions: BBC
Clemens Back with the Yankees. NYTimes.

Bid Rumors: Reuters & Thomson

The markets are in a tizzy this morning with rumors of PE bids and or approches for AOL, Time Publishing, EMI and Reuters. Even in Australia where media deregulation has just occured media stocks prices are up and will Microsoft buy Yahoo?

Reuters has confirmed that they have been approached by an unnamed third party about a bid for the company which they say may or may not lead to a bid. The most likely 'third-party' is Thomson which would like to add the news and information provider to their existing information (Legal & Regulatory, Financial) platforms. Given the sale of the Learning division - and some announcement about finalists should be imminent - Thomson is itching to spend the money and have been more than forthright about investing in expanding businesses that fit with their long term goals. Reuters does that and more importantly after a troubling effort early in the decade to harness the web and migrate their products to a new platform, Reuters appears to be in an upswing. This must be good news to Thomson.

Reuters shares were up sharply this morning placing a market valuation of over $15bill. While Thomson is expected to get $5.5bill for the Learning division their balance sheet is more than strong enough to complete this acqusisition with relative ease. It is a good job that Reuters CEO Tom Glocer was able to spend some time at Singita recently since he is going to be busy for the next six months.

Help, My Book Won't Open

New technology hits the monastery and the monks appear baffled. The trust worthy and reliable help desk support team arrive to sort it all out.

Thanks to Martyn Daniels for the link.

Google Lending Books

I attended two of the very well attended Google sessions at London Bookfair last week and in the second of these Jason Hanley from Google gave a full overview of the Google book program. He also gave a very short overview of some of the new initiatives that Google is working on and one of these caught my attention.

Google propose to roll out a book 'rental' and 'retail' program sometime before the end of the year. The program will enable customers to either have lifetime access to a title if purchased or to rent a title in weekly increments. Details of the financial arrangements are being discussed with the content owners at the moment but there is no reason to believe that both of these programs will not be launched by the end of the year. The program will be optional for publishers but represents just another of the expansion of options that publishers will have to distribute, market and/or sell their content.

Details at the presentation were sketchy so I emailed Jason the following:

Jason,

I attended your session at LBF last week and I was interested to learn a little more about the Book “Lending” program you touched on in New Initiatives. I would like to write something about it for my blog which is read by a fair number of librarians who would be interested in knowing more about this initiative.

Here are the brief notes I took:

• Borrowers will have the ability to ‘rent’ or ‘borrow’ a book for a week. · Full content of the book will be available
• This is not an ‘e-book’ program
• It will be launched by the end of the year (together with a purchase option which you also discussed)
• Final details are being discussed with content owners

Could you elaborate on the above by answering the following questions:

1. Is this a lending program or a rental program?
2. What do you mean when you describe this as not an e-book program?
3. What will the financial model look like for publishers?
4. Do you think the financial arrangements you arrange with publishers cascade into the current financial relationship between Libraries and Publishers? Typically publishers sell titles to libraries at a ‘short’ discount and do not receive additional payments no matter how frequently the title circulates. Presumably, in your arrangements with Publishers there will be some remittance to publishers each time a book is ‘lent’
5. Is this an ‘add-on’ benefit to publishers of the Google Book program and as such voluntary?
6. Is there any anticipated connection with libraries: could libraries act as intermediaries between their patrons and the Google “Lending” program or is there no practical need for this?
7. Any other information my readers may find interesting.

Thanks and if you don’t want to say anything about the above please let me know so that I can go ahead and make it all up in my blog article.

OK so the last bit is slightly irreverant but I hope it didn't cause him not to respond because so far no response. (He did open my email).

This will be interesting to watch and I think perhaps one of the more revolutionary changes that may evolve from a program like this could be a significant change in the financial relationship between libraries and publishers. In my view the current one time fee paid to publishers by libraries has to (and will) change to a per use fee. Libraries will pay fees based on circulation of the titles - both print and e-book versions. There are a few ways this may happen and none are mutually exclusive particularly as publishers and libraries experiment. For example,

• Calculate a unit fee per title and remit to publishers each time a title is circulated
• Each title is 'sold' in circulation increments - perhaps they expire - so a title is sold with 10 circulation 'units' and the library pays each time the book is circulated 10 times. (Perhaps the base level - in this case 10 - values the book at the retail price)
• Publisher agrees a site license for their titles at an institution which would be an annual fee covering all circulation for e-books and print titles. Each year the fee would be negotiated. Clearly in this case e-books are easily managed and this is a model already in place for database products but for print titles the solution would be trickier but not impossible.

In truth, evolution is coming to the relationship between publishers and libraries driven by Google and e-books and ultimately these changes will result in libraries becoming more relevant to publishers not less. As libraries are networked and catalogs indexed their collections are more accessible which means that publishers may want a bigger slice of revenue but it may also mean that they want to ensure that this avenue to consumers that libraries represent presents all their products in the best possible manner. That will mean that libraries get more attention and possibly are able to lend more content. Change is good.

Murdoch Seeks Dow Jones

Harpercollins owner News Corp has made an unsolicited bid for Wall Street Journal publisher Dow Jones (Reuters). The bid is priced at $60/share and Jim Cramer (crazy guy) on CNBC (which broke the story) suggests that this may jump higher if others get involved. Currently the offer price is 50% higher than yesterdays share price close so News is going for broke. This deal has been on the cards for years; however, Cramer noted today that the two or three executives and board members opposed to the deal are no longer part of the organization. He also speculates that members of the Bancroft family are already in his camp which could make approval of the acqusition easier.

Others may jump at the opportunity to own a prime name in financial reporting but so far Bloomberg for one has issued a denial. It would be a stretch to see Thomson Financial anti-up for the property because their entire focus is on electronic delivery. Thomson sold the bulk of its newspapers years ago. Private equity could be an option as well. Cramer also frequently mentioned his audience with the Digger back in 1996 when Murdoch was willing to offer $73/share for the company but was rebuffed. What discouraged Murdoch the last time was the suggestion that the Bancrofts would not approve the deal but this time that doesn't seem to be the case.

Related:
Reuters: Pearson shares up 5%
Forbes
Predictions 2007: Noted at the bottom of the page.

Borders International Update

Borders announced in March that they were reorganizing their store operations and would be divesting most of their international operations including the UK stores which they (mostly) acquired via the purchase of Books etc. In other parts of the world particularly in SE Asia and Australia/New Zealand, Borders built their brand in these markets from scratch. Initially the growth was slow: They only had a store in Singapore for a few years; however, by 2002 store development in Australia was in full swing. Things seemed to be going so well that Borders opened several new stores in New Zealand in the week before they announced that they we getting out of the international business.

In my old home town newspaper this morning, The Age confirms that private equity firm Pacific Equity Partners is actively interested in purchasing the Borders stores and naming rights in the Australia/New Zealand market. The book retail market in Australia is dominated by two retailers. Angus & Robertson, which is now owned by PEP, was owned by WH Smith and numbers about 180 outlets. A&R stores are predominately corporate owned. Dymocks is the other chain retailer and most of their stores are franchised. Leading Edge is a ‘consortium’ of independent retailers that have joined together to aid in business negotiations and enable technology development.

(On a related note, Readings a Melbourne independent retailer and customer of Global Books In Print for many years, won chain bookseller of the year in 2006 even though they only have about five stores. Mark Rubbo the owner has consistently won independent bookseller of the year for many years and successfully battled against a Borders superstore that opened across the street from his main store).

PEP is interested in expanding Borders across the market and will do so without merging the brand with A&R. A&R also own Whitcoulls in New Zealand and PEP appear to recognize that there is room in that market for both brands as well. The Age article also notes that Borders management are also trying to interest private equity in fronting a bid. It would seem likely that some accommodation will be made since the management will be vital to the continued performance and development of Borders in Australia.

Related:
What Borders Could Have Said
Borders Reports Their Strategic Plan

(Thanks to my Aussie stringer for the article).

Sting's Lyrics in Book Form

I had this idea last year that compendiums of an artists lyrics would make an interesting book product although I also suggested that including reflections on what the songs meant, what was going on with the artist/band at the time and some autobiographical material would round out the titles. I have read two books from the Continuum series of mini-books on seminal albums and they are quite interesting but one dimensional. Really long essays written by music critics they speak about the construction of the album and the songs on it as well as some of the circumstances surrounding the recording. My thought was that this concept would be more interesting if presented by the artists that wrote and performed the music.

The AP via the Miami Herald is reporting that all Sting's lyrics will be presented in book form and published by The Dial Press. The press release suggests that there may be some accompanying text with the lyrics however it is not specific on that point.

Some other suggestions: Hiatt, Thomson, Young, Waits, Wilson, Townshend, Armstrong, Lovett, Gallagher(s), I could go on...

Weekly Update

Deal News:
Thomson Learning Sale said to Encourge Share Buy-Back: Globe

Publishing:
About Book Reviews Sections: HuffPo
One Billion E-Books From Ingram: PR
LexisNexis Teams with Elsevier: PR
SilverChair and MGH announce Pharmacy Platform: PR
Elsevier Extends ScienceDirect ArticleChoice: PR
Elsevier Selects Rightslink: PR
McGraw Hill report first Quarter: PR
Edgar Award Winners: PR
Wiley in India: IHT

Other News:
Swets/Muze Glabal Announcement on Fed Search: PR
Generate, Inc. Announce tool For in Context Content Distribution: PR
OCLC Announce WorldCat Local: OCLC

Sports:
Whinging Cry Baby: BBC

Pearson 2007 Guidance

Pearson reaffirmed their guidance for 2007 and said the strong performance they had in 2006 was continuing into the early part of 2007. Strong adoption results and uptake from their new electronic online learning and assessment programs in Higher Ed and good performance from Penguin were largely responsible for the results. In summary their press release presented the following information:

• School to achieve underlying sales growth in the 4-6% range with margins improving;
• Higher Education sales to grow in the 3-5% range with stable margins;
• Professional revenues to be broadly level with margins improving;
• Penguin margins to improve further, as our publishing investment and efficiency programmes continue to bear fruit;
• Financial Times Group profit to grow strongly with our cost measures, integration actions and revenue diversification pushing margins into double digits at FT Publishing. IDC revenues to grow in the 6-9% range with net income growth in the high single-digits to low double-digits (headline growth under US GAAP).

Scardino is confident of "another good year for Pearson" so on the back of a record breaking year in 2006 the question will be how much they exceed the results of 2006.

Also of note, shareholders at the AGM approved a buy back program.

Press Release
Reuters

Thomson Reports 1st Q

Thomson reported an 11% top line gain and an 8% operating profit gain to start off the year. Organic revenue growth was 6% led by the Legal, Tax and Accounting unit. Diluted EPS was up 14c to 35cents versus the same period last year. The quarterly operating results encourage the notion that this is a very financially strong business with cash flow up 25%, significant investments being undertaken in new intitiatives and a closely managed cost structure. Furthermore, Thomson are bullish on the future:

The business outlook for 2007 that was provided on February 8, 2007 remains unchanged. Revenue growth is expected to be at the high end of the company’s long-term target range of 7%-9%, prior to the deployment of the proceeds from the sale of Thomson Learning. Operating margin is expected to be at or above 2006 levels, despite increasing investments in efficiency initiatives. Cash generated by continuing operations is expected to grow, excluding cash generated through deployment of the Thomson Learning sale proceeds.

Thomson expects its performance to further strengthen in 2008. The company expects to sustain its long-term revenue growth rates; operating margin is expected to increase to above 20%; and free cash flow is expected to strengthen, as improvements in operating performance are projected to more than offset the loss of Thomson Learning’s free cash flow, even before deployment of the Thomson Learning sale proceeds.

Here is the press release.

In discussing the pending sale of the learning unit CEO Harrington said:

"The Thomson Learning sales process is on schedule and has attracted a very high level of interest from prospective buyers. We anticipateannouncing a buyer at the end of the second quarter and closing thetransaction in the third quarter. We will use the proceeds from the sale topursue opportunities aligned with our growth strategy and business model.We will be disciplined in reinvesting the proceeds and will focus onopportunities that drive growth and create value for shareholders."

The company did not break out financial results from the Learning group which is classified as discountinued operations other than to show consolidates earnings up $82mm over last year. It is hard to draw any conclusions from this given the limited detail however.

Here are the slides from their financial presentation.

Computers In Libraries

The conference was in Virginia last week and here is a great summation of some of the sessions from John Dupuis (Confessions of a Science Librarian).

Thomson and Harcourt Reunited Again?

There was an interesting suggestion doing the rounds in London this week (Reuters) suggesting that the prospects for Thomson Learning and Harcourt Education would be better if the businesses were combined by one purchaser. The discussion started in an article in the UK Sunday Telegraph which pointed out that the businesses were once part of the same operating company and that at least two of the private equity groups looking at these companies are looking at both of them.

Thomson Learning and Harcourt were part of the same group until 2000, when Harcourt General was bought by Reed. Reed kept the school textbook and testing division and Harcourt's science and medical titles but sold the higher education arm to Thomson Corporation, the Canadian publisher.

The combination could result in additional competition for Pearson and McGraw Hill which retain both School and Higher Ed businesses. While the school and college businesses operate in definably different environments and are generally managed separately within the larger organizations, the scale opportunities could generate millions in additional operating profit were the businesses combined. Coupled with the imperative to create digital delivery platforms for their content and this combination may make some sense.

It will be interesting to see the strategy employed by the bidders. The Thomson auction is expected to be completed first but would one firm try to preempt the bid process for Harcourt to secure that company in advance of the Thomson process? Having secured Thomson, will Reed benefit financially if the sale price for Harcourt contains some 'combination' bonus based on savings the purchaser expects to receive with a combined business? Regardless, it will be a long while until the opportunity to combine two educational publishers of this size comes again so I suspect some pencils are being sharpened as we speak.

Bondi Digital to Create Rolling Stone Archive

Earlier this year Bondi Digital publishing announced an agreement with Playboy Enterprises to create a DVD compendium of every issue. They recently announced a similar deal with Rolling Stone. These were the guys behind The New Yorker archive that was released two years ago.

The first release of the Playboy titles (1950's) is due in October and the The Rolling Stone titles around the same time.

Just in time for Christmas.

Weekly Update

Deal News:
KKR and Carlisle group join the race for Thomson Learning. Reuters The Times
Wickes Group has retained Credit Suisse to look at strategic options for The Daily Racing Form. PRNewswire
Is Pearson Plc underweight? NewRatings

Publishing:
Harper SanFrancisco and the search for a follow-up to The Left Behind series. SF Chron
Iran proposes to publish UK Sailors memoirs. Iran news
12 Arrested in Turkish Bible Publisher murders. Guardian
BusinessWeek article about Korean Comic Publishing. Businessweek
Interview with Robert Harris. Telegraph

Other News:
Reed targeted by Protestors. The Independent
Predicted demise of Libraries not supported by visitor numbers. PRNewswire
WH Smith operating update. Hemscott

Turkish Bible Publisher Targeted

News is reported of a new attack on publishing freedom in Turkey. If you will recall a few months ago a highly regarded news reporter was killed outside his office and today comes news of a horific attack on a Turkish bible publisher. From the UK Guardian newspaper:

The three victims - a German and two Turkish citizens - were found with
their hands and legs bound and their throats slit at the publishing house.
Police went to the scene after receiving calls about a fight, Milliyet newspaper
reported.

Thomson Learning Sale Update

The Financial Times updates the status of the Thomson Learning sale suggesting that first round bids will be submitted at the end of April. As things go this is slightly later than originally planned but they also confirm that the purchase price is expected to exceed $5.5billion which is approximately 10x EBITDA. From the article:

The bidders include a consortium made up of Bain Capital Management, Thomas H. Lee Partners, the Blackstone Group along with Bertelsmann, the privately-owned German media company; a second bidding group is made up of Providence Equity Partners, which is possibly teaming with one other investor, and has the learning division’s management’s on its side, according to the sources. The Carlyle Group and Kohlberg Kravis Roberts & Co. are bidding alone, the sources said. Providence’s partners in the bid could not be confirmed, but one of the sources said it is teaming up with Ontario Teachers Pension Plan, while another source said it is teaming up with Pearson

Google Book vs Microsoft Live Search

I will post more on this next week but the differences between the two presentations was considerable. Regrettably, Microsoft may have the better product. Regrettable, because on the basis of attendees at the respective presentations, few publishers will know it is better because few publishers bothered to show up at the presentation. This may have been partially due to the difficult to find conference room in which the presentation was made; however, MS only had about 20 attendees versus two Google presentations in front of over 125 in each case.

Microsoft have definitely learned from Google in the way Google approached the presentation and the management of the publishers' content. The display is visually more appealing in the Live case and they have incorporated a number of widgets that allow outbound linking which will be very useful to users and publishers. It is the publisher 'work-bench' that I identified as a key differentiator. In Live, the access for a publisher to manage the content - particularly content access, pricing and rights information - is especially functional versus the Google model. I will look into and describe the benefits to Live next week.

No publisher should market and promote their books exclusively through the Google Book program. Intuitively, most publishers would understand this, but why there were so few people willing to spend the time with Microsoft is shocking. Microsoft Live for Books is the new kid on the block and it would seem more likely that having heard the Google spiel numerous times, publishers would be very interested in hearing from someone else. Especially when that someone else has gone out of their way to support publishers copyright.

London Bookfair

It is a fabulous venue for LBF this year; I missed last year's disastrous trip to the Docklands but against Olympia the venue at Earls Court is far superior. It also helps that the organizers have listened to the attendees and the publishers to make the aisles wider, the furniture and fixtures more accommodating and pleasant and made sure there were enough food outlets. Olympia was especially bad at food and drink outlets.

It is also an active show with a lot of seminars to attend but the traffic on the floor is also robust. There is more than enough discussion about the state of the business both from the perspective of publishers and retailers. There has been some expressions of concern I have heard about the state of book retailing in the UK and the unknown impact of the Border's divestiture. There have been rumors that Richard Branson is interested in acquiring the chain and if that were to happen perhaps it would invigorate the book segment. There is a pervading emotion of disappointment by publishers in the way book retail has been managed in the UK and there is a general feeling that publishers can not expect improvement any time soon. It is a sad circumstance.

Given the level of acquisition activity in education publishing, there is a sense from publishers I spoke with that this is going to continue to be a very active year. There is an expectation that the Harcourt and Thomson deals are only the beginning and that trade will also see at least one major house put on the block before the end of the year.

Weekly Update

As mentioned London Bookfair is next week and posts will be sporadic.

Deal News:
Wicks buys Thomson Education Direct (Distant Learning) Times Tribune
Torstar may be under attack and what of Harlequin? National Post
A possible buyer of the Borders' Australia and New Zealand stores. NZ Herald
Media finance conference in Europe announced. Release
Buyers are less then enthused with Primedia enthusiast magazines. Reuters
Reed Elsevier advised to gear up. The Independent
Nancy McKinstry thinks Germany is ripe for new deals. Reuters
Axel Springer likely to do more deals soon (doubtful in publishing). The Australian

Google News
Lorcan Dempsey linking to comment on Google and Publishers Blog
Adam Hodgkin on publishers grumbling about Google Blog

Education:
Harcourt have had a lot of problems in School academic testing this year. Casper Trib. ZDNET
Thomson revolutionizes marketing text Release
There will be more on this: Wikipedea 'broken beyond repair' according to founder. ITNews

Other News:
Penguin obsession Blog
Peter Brantley's lively discussion over a $58 Paperback Blog
Mike Hyatt on Imprints and the decision to do away with them Blog
GalleyCat linking to a Bookseller article about what works here but not there. Blog
Joe Wikert gets all riled up about the logic of Print Blog
Reed Elsevier can't trade mark 'Lawyers.com' Bloomberg
SmartMoney wonders why no one is excited about Gannett. Smartmoney
The commercial E-Book market is broken. Blog

People:
McGraw Hill Hire Dan Caton as Head of Learning Group Release
New Board Members for SIIA. Release
Riverdeep/Houghton Mifflin announce appointment of President. Release

Sport:
Man Utd into the Champions League semi-final in style BBC

Reed Speculation

Via the Independent (UK), an investment analyst is suggesting that Reed Elsevier is under-valued and that a PE bid could push the share price up 85% higher than yesterdays close of 619p.

Collins Stewart adds that, with a current debt weighting of just 1.4 times earnings, Reed is under-leveraged and if it does not gear up its balance sheet "maybe private equity will do the job instead". The broker estimates at a debt multiple of 8 times earnings the shares could be worth up to 1,147p

Once the sale of Harcourt is done perhaps some activity will heat up. I see them being very interested in Bureau van Dijk as it would fit nicely into their legal and regulatory segment. Interestingly, the international spread of BvD could also aid Reed in expanding legal and regulatory into wider global penetration with new products and data/information.

Media Deal Confusion: But Lots of Them

From Financial News Online (US) there were 282 disclosed deals valued at $114.6bn (€87.3bn) in the entertainment sector in 2006 according to PricewaterhouseCoopers , marking the best year for M&A in the media and entertainment sectors since 2002, when there were $118.6bn of mergers done. According to PwC the outlook for 2007 looks stronger, with a backlog of 132 deals worth $103bn. Those deals, which have been announced but not completed, include the proposed buyouts of Clear Channel and Univision,valued at $26.7bn and $13.5bn.

Given the activity that folk in the publishing and business information segment have seen in the past 12mths, it is no surprise that the numbers year on year look impressive. Two very active investment banks in our sector also publish annual reports on their views of the business. (Veronis Suhler also active in this space publishes a fat annual report which is sold so I didn't access it).

In their report presented in January The Jordan, Edmiston Group contended that there were 621 deals worth $57.3Billion in 2006 and 542 deals worth $54.0Billion in 2005. The JEGI report covers 11 media segments with Marketing and Interactive Services with 138 deals and Online media with 174 deals leading the way. A short synopsis of each segment and the notable deals for each is also presented in the report. By way of forecasts, they only project what they expect to see happen in the trade show space which increased in the number of deals between 2005/6 but saw a decrease in the value of total deals. (In each of their periodic reports they pick a segment to forecast and more of these past reports are on their web site).

Desilva and Phillips has also done considerable business in the past year - by their own admission more than their pessimistic 2005 forecast - and while the numbers are again different from those above they do show impressive growth. From Desilva and Philips 2006 Market Report there were 151 deals worth $20.5Billion in 2006 and 115 deals worth $6.0Billion in 2005. They do take a look into the future:

Just as the economic outlook continues – even improves – in 2007, we see a continuation of a great deal market. We expect the number of deals and the dollar volume to continue – at least – at the record level of 2006. We are also aware of a very full deal pipeline. We expect to see more public companies going private, just as Reader’s Digest did – and it’s not just Sarbanes-Oxley. As we’ve seen, media executives now know that they need to transform their companies into platform-neutral content enterprises combining strong traditional and new-media distribution channels. But to do this makes it even more difficult to manage earnings from one quarter to the next, as the public markets demand. One result: the solution offered by buyout firms looks ever more attractive.

The outlook for M&A in 2007 is as good as we’ve ever seen. All the pieces are in place: availability of funds, favorable interest rates, eager buyers without the time to build rather than buy, brands that need to find new delivery platforms, and a regulatory climate that all but deliberately discourages new companies from going public and existing public companies from controlling their own fates. There is yet another population of buyers perhaps waiting in the wings – European media businesses newly flush with a strong Euro and, finally, thriving domestic markets. To say we’re looking forward to the excitement is an understatement.

No matter how the numbers are tabulated, given the activity already announced at the tail end of 2006 and the first quarter of 2007 it is hard to see 2007 not being a banner year for M/A activity in the media space. Already Wolters Kluwer education has gone for over $1.0billion, Veronis (Private Equity) has purchased Advanstar for over $1.obillion and Houghton Mifflin has been purchased by Riverdeep. In the wings are expected $4-5Billion deals for Thomson and Harcourt and $1.0billion for Bureau van Dijk. If Pearson or Reed are gobbled up by PE then it really will be a banner year.

There is a key comment in the above forecast which studiously points out that some very big and seemingly sophisticated media companies still have a lot to do to re-make their companies into 'new-media' content providers and not print companies. Five years hence the companies purchased by private equity will burst forth into the public markets in almost unrecognisable form having gained the flexibility to transform their companies into true online and new media players.

Deal News: Bureau van Dijk On the Block

The Daily Telegraph is reporting that Bureau van Dijk has hired LongAcre Partners and Goldman Sachs to review the company's strategic options. Generally a prelude to a sale.

Industry sources said Bureau van Dijk is likely to generate bidding interest from business information publishers Reed Elsevier, Reuters, Pearson and Incisive Media, which was last year acquired by private equity firm Apax. US bidders such as Dow Jones & Co, publisher of the Wall Street Journal, Standard & Poor's owner McGraw-Hill and Factset are also likely to be interested.

BvD was sold to Candover a number of years ago when the founder and owner sold 60% ownership. Senior management own the balance of the stock. The company publishes business and company information on millions of companies (private and public) around the world. From their web site:

We provide detailed, analytical databases, for in-depth research, such as AMADEUS (a pan-European database), ORBIS (33 million companies around the world) as well as extensive country-specific databases (FAME, DIANE, DAFNE). These products are ideal for in-depth research of individual companies, identifying
companies complying with specific criteria plus detailed analysis of company
peer groups and benchmarking. In addition, our ZEPHYR database covers M&A
deals and rumours around the world.

The Telegraph suggests the company could be worth over $1.1billion; however, financial information is sparse and this company could be a one of a kind deal given the value of the type of information it collects and the depth of its databases.

Bloomberg LP

The NY Times has a short item regarding the $20Bill Fortune valuation of Bloomberg LP. In happy news to all the potential operating company acquirers, when Bloomberg is asked if he could watch the company be acquired by private equity he says no. There is no indication that a sale is in the works (an offer was rumoured last year) and other than the unlikely event that Bloomberg will run for President it doesn't look like anything will change until he has finished his term as Mayor. As The Times alludes, real numbers are hard to confirm but with operating margins of 30+% and a commanding market share this could be an expensive purchase for someone; whether it would go for the multiple Fortune suggests is hard to believe but I am prepared to be surprised.

With the cash that Bertelsmann, Reed and Thomson have or will have there could easily be some competition for this one in the next 6-18mths.

BookExpo America Conference Agenda

The pre-show education and seminar program has been announced by BookExpo America and I wanted to draw attention to my contribution. A few months ago, I thought it would be interesting to hear from some publishers who are using blogging to get their message out and to understand the issues, surprises and successes. The organizers have used my idea to build a program around this theme and I hope you will join us and support the rest of the program.

Here is the day/time and description of the seminar. As you can see, I will be supported by a purposely divergent group of publishers.

Thursday, May 31, 2007
2:30 – 3:30 PM
1E04
Corporate Social Media Platforms: A Case for Publisher Participation
Corporations in all industries are experimenting and effectively using social networking tools to build product awareness, communicate and converse with customers and experiment. In the publishing environment, books provide an easy platform for the many individual consumer and author blogs that exist – and there are many – but what of the publishers?
For publishers, the question is not whether they should be involved in social networking activities (blogs, RSS, podcasts, etc.) but HOW should they go about experimenting and launching effective social network programs. This session provides an overview of the activities of various publishers and provides a window on their motivations, successes and expectations. Audience members will hear how these publishers are creating a ‘social’ identity to leverage their brand, content and authors and support marketing and sales goals.

Moderator: Michael Cairns, Information Media Partners
Panelists:
Karen Christensen, CEO, Berkshire Publishing
Jimmy Behrle, The Overlook Press
Mike Hyatt, CEO, Thomas Nelson
Carrie Kania, Publisher Harper Perennial, Harpercollins

London Bookfair

LBF starts a week on Monday and I shall be there. Let me know if you would like to meet at the show or later in the week in London. I am looking forward to it and perhaps will report on some of the sessions I plan to attend and whatever else I hear about during the week.

Email: michael.cairns@infomediapartners.com

Richard Dawkins: The God Delusion

Well it is Easter weekend and I thought appropriate to mention that I just finished The God Delusion by Richard Dawkins. The book is only one of several the author has written over the years and if they are as readable as this one they might be good to look for. This book is very entertaining and believable (although I suspect if you are staunchly religious you might not think the latter), and the writing style is less heavily dogmatic than it is conversational. It makes fairly easy going even though some of his arguments are complex. Here is an short interview with him on the UK news show Newsnight.


The title has been out for months and is a best seller in the US and UK, and it may have tapped a nerve with respect to the increasing representation of religion in politics and political life. It is interesting to read that he makes an assertion (as other writers cited by him have also concluded) that many of early leaders of US political life (notably Jefferson) were probably atheists. Given this shared perspective that the founding fathers had in creating the constitution I wonder what they would think about the current mingling of religion and government - not just here but all around the world.


Lastly, I am unsure of the motivation for the design of the US book cover but I was struck by the association with the (stupid) mirror on the cover of Time's Person of the Year issue. The God Delusion has a bright silver mirror like cover and in reflecting your image to you it seems to emphasise Dawkins view that "we make our our purpose in the world" and our purpose and morality in life should not governed by organized religion.


Dawkins website

Borders: The Gang That Couldn't Shoot Straight

Quick on the heals of their mediocre strategy declaration a couple of weeks ago the company announced yesterday a reasonably significant recapitalization of their current and revolving debt facility. True to form, the details were not exactly clear in the press release why this strategy made sense and why their financial advisers seemed to have a material stake in the effort. So arcane is the description of what they intend to do with the $250mm that I have yet to find a financial report deciphering it.

Borders Group has been advised that, in connection with establishing a hedge of the convertible note hedge and warrant transactions, the counter parties to those transactions or their affiliates expect to enter into various derivative transactions with respect to Borders Group's common stock concurrently with or shortly after the pricing of the notes. The counter parties or their affiliates may also enter into or unwind various derivative transactions with respect to Borders Group common stock and/or purchase or sell Borders Group common stock in secondary market transactions following the pricing of the notes (and are likely to do so during any observation period relating to the conversion of a note).

The lack of reporting could also be the result of their apparent omission of any reference to an action like this in aforesaid strategic plan. Nevertheless, it doesn't really matter since this morning they decided that they needed to reconsider and that they were cancelling the offering. They blame shareholder feedback - which must have been pretty swift - and my guess is that the existing shareholders were not at all convinced that this financial restructure wasn't going to be immediately dilutive. It is also likely the shareholders found out via the press which doesn't seem ideal....

Borders Group, Inc. (NYSE: BGP) has determined, based on shareholder feedback,
to re-evaluate its proposed offering of $250 million of Convertible Senior
Notes, announced yesterday. The offering will not proceed today as originally
planned while the company re-evaluates this and other financing alternatives.
Upon completion of this re-evaluation process, Borders Group will issue an
update at a later date.

April Forewarning

On the back of their self-regulation of the famous swimsuit issue, Sports Illustrated announced that they would no longer report on women's professional volley ball. In comments, the company stated that the decision to restrict circulation of the swimsuit issue to libraries had led to some internal 'soul searching' and, as a result, the company had decided that they would no longer picture the scantily clad and excessively athetic atheletes of the PVA in the magazine. No word yet from the library community.

In other news, the ISBN community reported that they are considering adding a suffix to the recently adopted 13 digit ISBN syntax that will enable ISBNs to include additional characters and/or numbers for parts of products. The proposal would add a decimal point followed by whatever series of numbers and symbols the publisher required. The agency commented that the additional characters would not be confusing - unless the publisher chose to use a rune - and that they would be basically ignored by electronic bar-code readers. The decimal point would be calculated as a zero.