Pearson Speculation (Again)

Yet again, an analyst has suggested that pressure on Pearson will grow given the sales of Harcourt and Thomson Learning at such high multiples. As reported in This is Money (Daily Mail), Deutsche Bank has raised Pearson to 'buy' based and,

demonstrated why, with a bullish 'sum of the parts' valuation on the stock of up to £10.2bn, or 1100p a share.

Currently, Pearson stock is at 823p. Furthermore (talking up the stock),

Mark Braley at Deutsche reckons Pearson's current share price, down 7½p at 823p, ' materially undervalues' the group. He added: 'There is a strong case for management to consider an aggressive restructuring of the portfolio.'

There is nothing to suggest that anything is imminent and Pearson has consistently said that they will resist a P/E advance.

Have Press Release Will Travel

Before you leave on your next vacation consider dropping a press release to let friends and family know about where you are off to. PRNewswire

More Borders News

Aside from another high profile resignation, a few media journals (MW, TD) are reporting that Borders are offering first chapters via mobile phone. Interesting news strangely unmentioned in the WSJ interview earlier in the week. Here is a review from slashgear;

If Borders can keep up with (and hopefully extend) their promised thirty a month then that, together with the savings available (which brings prices in line with online stores) could see the service succeed. Before then, however, I’d like to see a little more clarity for first-time and novice users, who have been exposed to so much “fear the internet!” melodrama that they might not get past the first download warning.

Looks like an interesting concept; it will be even more interesting when the entire book is on a mobile which has happened in Japan. (Yes, big in Japan).

E-Travel Guides Redux

Last week I reported on DK's new participatory travel guides (as well as sharedbook.com) and this week I was referred by Michael Holdsworth to a French publishing company Editis. To date I had not heard of them but they tell the world they are,

Editis is the second-largest publishing group in France, a major player in European publishing, and generally a star of the publishing world. Editis is present in the literature, education and reference publishing sectors, and is also a major player in the distribution field through its Interforum subsidiary.

On their site they offer a view of the digital future. It shows a couple interacting with electronic content that bridges the gap(s) between the physical and digital world. Substitute the visit to Bruges with my imaginary trip to Boston (in my DK article) and their depiction is similar to my imaginary world. The video is in French but as Michael told me 'it hardly matters'.

Formidable!

On the Border(s): Off the Reservation

Amid the Riverdeep/Reed excitement yesterday, we missed the veritable slew of news about Borders. Most of it of limited value but humor me: Firstly, the company announced a new CIO by announcing the departure of (perhaps) the key executive that could help the company become a more integrated retailer (mall stores, super stores, website). Rick Vansura had two terms with the organization (1994-1999) and from 2003. One of his primary initial jobs was to launch a Borders web site.

The organization subsequently threw in with Amazon.com and he took up other responsibilities, left the company and then returned. In his current role he was responsible for strategic direction but this seemed to be more of a place-holder while George Jones decided what to do. Currently, the Borders strategy is not dependent on any one individual rather it depends how recently they have looked at the Barnes & Noble annual report.

The announcement was clearly hurried and they tacked on the cio announcement to make it look planned. With the IT issues Borders faces wouldn't it be better to focus on that story and how this ex-medium sized book retail VP Technology can help them?

Secondly, the company seems to have stepped into something smelly by stocking Tin Tin, a heretofore standard children's book but which is now regarded as racist. Somehow, they have garnered all kinds of newspaper commentary and reports about this rather negative situation. I think they need better PR.

And finally, George Jones was interviewed by Jeff Trachtenberg of the WSJ yesterday and said basically nothing new other than the following:

Why are retail stores having a problem? Answer: Internet, Walmart and Costco. Nothing about store location, store mix, better partnerships, better store layouts, better in store help, better community.

Are you too late to the webstore game? No. Well he couldn't say Yes; however, they do need to extend the community aspect with respect to their customers and investment here is probably unavoidable. They want to mimic B&N in the integration of store and web but there are no new customers who haven't already chosen between B&N or Amazon. They must separate the fulfillment and supply chain aspects from the community development/membership. Perhaps they are, but they could end up sinking a lot of money in a transaction site that doesn't come close to separating them from B&N and Amazon.com

An overemphasis on a digital offering? No, because people over 35 don't know how to program their IPOD. Hummm. Admittedly speechless.

Reed & Riverdeep Deal: Further Information

From the London Times:

Reed is also taking a $300 million stake in Houghton Mifflin Riverdeep Group, which will leave it with an 11.8 per cent of the common stock in the enlarged company. Houghton Mifflin Riverdeep is privately held, with a range of backers including the Irish stockbrokers J & E Davy. Existing investors put up $23 million of equity financing to help to meet the $3.7 billion cash requirement for the purchase.

Also of note, there was never a deal book circulated which recalls the initial analyst commentary when Reed announced the sale earlier in the year and O'Callaghan was heard commenting that he wanted the business. Given the timing of his 'reverse acquisition' of Houghton Mifflin there was general belief that he wouldn't be able to do it. Nevertheless here we are.

It will be an interesting company to watch: Riverdeep has a background in electronic publishing which represents the challenge facing both HM/Houghton and Thomson Learning as they attempt to catch Pearson. The dynamism of the educational publishing market will accelerate over the next five years as these three business transform the way educational material is delivered, the manner in which students learn and the way education is organized and measured.

Reed Sells Harcourt

Essentially on-time, Reuters is reporting that Riverdeep will purchase the remaining Harcourt assets from Reed Elsevier for $4.obill. Reed earlier announced they had sold the assessment segment to Pearson for $950mm.

Reuters.
MSNBC

Harcourt finished 2006 with revenues of Eur 1.4bill ($3.0bill) and operating profit of Eur190bill ($140mm). 2006 operating profit was boosted by currency fluctuations. Reed have sold the education business for a revenue multiple of about 1.7 which isn't bad going.

Earlier this year, Riverdeep performed a reverse takover of Houghton Mifflin in a deal worth $5.0mm, Apax Partners purchased Thomson Learning for $7.7bill and Bridgepoint bought Wolters Kluwer education for $1.5Bill.

Under the headline "Wheeler Dealer," the Irish Independent profiles Barry O'Callaghan and how he got here.

Dewey: Hip or Not Hip?

The juxtaposition is interesting: Last week the NYT had an article (in the fashion section) about hipster librarians who among their avocations count guessing Dewey classifications for everyday items as a drinking game.

“I got the Joy of Sex,” Ms. Yao replied. “I thought for sure it was French Women Don’t Get Fat.” Ms. Yao could be forgiven for being confused: the drink was numbered and the guests had to guess the name. “613.96 C,” said Ms. Yao, cryptically, then apologized: “Sorry if I talk in Dewey.”

But from hipster librarians - and by the way, in the letters section this week some older generation librarians took exception to the notion that this group of libraians was somehow unique - we go to hipster libraries. This week the Times has an article about the supposed end of Dewey currently showing at the Gilbert Arizona public library. The libary has shrugged off the shackles of the dewey decimal system and abopted a commercialist subject coding method - just like a Barnes & Noble:

But the new library in this growing Phoenix suburb has gone a step further. It is one of the first in the nation to have abandoned the Dewey Decimal System of classifying books, in favor of an approach similar to that at Barnes & Noble, say, where books are shelved in “neighborhoods” based on subject matter. It was Harry Courtright, director of the 15-branch Maricopa County Library District, who came up with the idea of a Dewey-less library. The plan took root two years ago after annual surveys of the district’s constituency found that most people came to browse, without a specific title in mind.

The aspect of creating a more user friendly environment for patrons is a good one. Perhaps the imposition of Dewey into the public library setting was always one of those instances where the view point of consumers (patrons) was lacking; but, in this article there is little about whether the Dewey system can or is adapting. The hook to this story, is the ardent pursuit by Mr. Courtright for its elimination and this strikes me as rather misguided.

Her assessment, though, understates his goals. Throughout the recent annual convention of the American Library Association, in Washington, Mr. Courtright and 16 of his employees paraded around wearing and distributing eye-catching badges that bore the word “Dewey” encircled in red with a slash across the middle.

Certainly, Maricopa has made a valid choice if it satisfies the needs of their patrons; however, why is the choice absolute? Why pursue a crusade, aren't there better things to consider? Moreover, the Dewey system, LC, and BISAC (which Gilbert's system seems to mimic) are managed standards and all have good points and bad but why call for the exclusive selection of one over the other? Furthermore, bibliographic vendors - OCLC included - have created 'cross-walks' or linkages between the various subject classifications both as a way to augment titles with only one subject and as a way to provide more flexibility for users of these data records in how the records are cataloged.

With respect to B&N-like shelf locations it is interesting to note that B&N's are not the same as Borders' which are not the same as Ingram's. The approach Gilbert is taking is worth following especially if it helps patrons, but the crusade aspect is a waste of effort; rather pursue a standards based approach that either helps improve Dewey or supports a library version of BISAC.

News Update: Week 7/9

Deals, M/A:
Apparently News of Murdoch's Dow Jones Purchase was Premature: MSNBC
Not so Smooth: Pearson are Selling Les Echos: WSJ
Soon to be everything except moot court, LN buys services provider: Dayton Bus Jrnal
Visant (educational pulisher) for sale: Reuters
In case you were wondering, Proquest are now Voyager: PRNews

Publishing:
Publishers create web travel aids: Galleycat

Retailing:
Looking for Divine Intervention for Christian Retailing: Washington Post

Search:
Topic Specific Search Engines are the Next Best Thing: Economist

Library:
Book Industry Council (UK) looks to improve Library Supply Chain: PN

Sport:
Beckham arrives (and Posh): LA Times (It is all a bit silly)
Belmar Five: 34:10

Amazon works With Kirtas to Digitize Books.

I missed the following announcement from some reason. At Bowker, thought about purchasing one of these Kirtas machines (about $100,000) that scan books without the need to destroy them. The book is placed on a v shaped platform and air is used to turn the pages between scans. Some of you have seen them demonstrated at BookExpo. The companies ,
announced,

a collaboration with universities and public libraries to preserve thousands of rare and inaccessible books from their collections and distribute them via BookSurge’s Print-on-Demand service. This collaboration, which will greatly enhance the selection of rare and historic books for sale on Amazon.com and other retail channels, represents a breakthrough approach to digitization and preservation that will ensure the public will have access to these works indefinitely via Print on Demand.

Amazon bought BookSurge about three years ago to bolster their print on demand capacity. Emory University, University of Maine, Toronto Public Library, and Cincinnati Public Library are the first organizations to enter into agreements with Kirtas to make their rare-book collections available via Amazon.com.

Gather The Romance Authors

Gather.com is looking to find the great american romance novelist (my words). The company has teamed with Pocket Books (Simon & Schuster) to launch a writing contest, the winner of which will win a publishing contract.

Would-be novelists have until late August to submit manuscripts to romancenovel@gatherinc.com, and Gather.com members will have a say in selecting the winner, the company said.

Some of you will recall that Gather.com launched a similar competition earlier this year that resulted in a mystery writer winning a contract.

In this case, I doubt they will get anything like the kind of substantial and repeat participation that Harlequin gets from their eharlequin.com site. More on this next week.

Everything is Miscellaneous Review

Fellow traveller and sometime PND contributor John Dupuis (Confessions of a Science Librarian) recently reviewed the book Everything is Miscellaneous. In that book, the author David Weinberger takes a look at some things relevant to book and data lovers. Specifically, he looks at the comparison of Amazon and bookstores and also the Dewey system. John has some contrarian views on the conclusions Weinberger draws from these examples,

Starting on page 16, he begins a comparison of the Dewey decimal system libraries use to physically order their books with the subject approach Amazon and other online systems use. I find this comparison more than a bit misleading, almost to the point where I think Weinberger is setting up a straw man to be knocked down. Now, I'm not even a cataloguer and I know that Dewey is a classification system, a way to order books physically on shelves. It has abundant limitations (which Weinberger is more than happy to point out ad nauseum) but it mostly satisfies basic needs. One weakness is, of course, that it uses a hopelessly out of date subject classification system as a basis for ordering. Comparing it to the ability to tag and search in a system like Amazon or del.icio.us is, however, comparing apples to oranges. Those systems aren't really classification systems but subject analysis systems. The real comparison, to be fair, to compare apples to apples, should have been Amazon to the Library of Congress Subject Headings

In the end he does enjoy the book,

I find it frustrating that in a book Weinberg dedicates "To the Librarians" he doesn't take a bit more time to find out what librarians actually do, how libraries work in the 2007 rather than 1950. (See p. 132 for some cheap shots) But in the end, I have to say it was worth reading. If I disagreed violently with something on virtually every page, well, at least it got me thinking; I also found many brilliant insights and much solid analysis. A good book demands a dialogue of it's readers, and this one certainly demanded that I sit up and pay attention and think deeply about my own ideas. This is an interesting, engaging, important book that explores some extremely timely information trends and ideas, one that I'm sure that I haven't done justice to in my grumpiness, one that at times I find myself willfully misunderstanding and misrepresenting (misunderestimating?).