Borders Australian Stores

The Australian Bookseller and Publisher is reporting (via SMH) that KPMG will be circulating the black books to parties interested in acquiring the Australian Borders stores on Thursday. The magazine is reporting that the business unit could be worth over A$200mm and Dymocks may be the leading candidate for acquisition. Angus and Robertson the other leading contender is owned by Pacific Equity Partners which also owns New Zealand retailer Whitcoulls and has stated an intention to form a large retail chain and then float the business on the stock exchange.

ABP also suggested that Australian big box retailers Woolworths and "Big W" may also be interested. Stay tuned.

(ABP is a Bowker property - Hello to all the staff down under).

Harlequin Reports

Torstar the owner of Harlequin reported marginally higher revenues against the same period last year for the Harlequin operating unit. They expect full year revenues to continue to improve against a 'difficult' 2006. Torstar's main revenues are generated by newspaper advertising revenues which continue to fall (as is the case with most North American newspapers). Overall the newspaper group's revenues rose just less than 2% for the quarter versus the same period last year.

Harlequin has been under-going a reorganization which began earlier last year and in the quarter operating profit was up 20% from $10.2mm to $12.5; however, the company also stated that operating profits in 2006 were artificially low due to shipping problems. (Torstar Press Release). First quarter revenues were up $6.2mm but included $5.1mm in exchange rate benefit. Second quarter revenues were up $1.4 including a gain of $0.9mm in exchange rate fluctuation. For the first six months Harlequin revenues are up only $1.4mm at constant rates on total revenues for the six months of $240.4mm (less than 1%). Operating income, where it looks like efficiencies are having some impact is $31.6mm for the first half which represents a 25% increase and an operating margin improvement from 11% to 13%. (There was an $0.8mm exchange benefit in operating income).

Details on the company's operating issues is sparse but it does look like the company continues to have difficulty expanding their revenue base. The lack of revenue growth is clearly the story here with the company struggling over the past several quarters to burst out of the doldrums. They have commented that mass market continues to be a difficult market for them and it would be interesting to hear from the company how some of their new sources of revenue - particularly online - are doing. Some of the things they are doing with online community building and leveraging their brand online are truly exciting and innovative but strangely lacking in the company reports.

Everyone knows this is a company with a tremendous brand name and image: With many other trade publisher's (with far less brand strength) reporting good to strong growth in revenue and operating income in the last few weeks it seems Harlequin are not performing to expectations.

Interview with Jane Friedman

Interview in Forbes with Jane Friedman, CEO Harpercollins.

Forbes: When you look out into the future of publishing, what do you see?
JF: I think the book business is the healthiest I have seen it in a very long time. We are seeing a breadth of titles selling in many different channels of distribution. We are no longer publishing for the independents only, the chains only, the big box merchandisers only, the online sellers only. We are selling across the board. The health is the breadth, diversity and range. That's good for business, and more importantly, it's good for society.

Rest of the interview here.

File Under Any News is Good News

Personally, my interest in the Tour Dey France ended the day after Floyd Landis won last year and we found out he was a doper. The feel good story bleed to death. After watching the tour through the Lance years Mrs PND and myself now have no interest; however, we are unique because Versus (candidate for dumbest brand name change of the year) the cable channel is reporting the highest viewship ever. This proves that any news is good PR and notoriety is paramount.

E-book Reader for IPhone

Via teleRead an application for the IPhone that enables the reading of over 10000 books on the IPhone.

Adam at Exact Editions will be excited.

Note one of the comments (not sure if it applied to the IPhone or not):

Having played around will all the current iPhone ebook “solutions”,
including the one mentioned here, I’m afraid none of them will really fit the
bill for a serious ebook reader. There are two major problems:
1. Lack of local storage. If the book is stored on a server then the reader is pretty much out of luck in areas of poor cell or wifi coverage.
2. Inconvenience. Reading a book in a browser doesn’t work well because you can’t bookmark your page. Several times I’ve had Safari quit on me and then had to re-open the book and scroll through 250 pages to get to my place. Storing the ebook as part of the url solves the local storage problem, but doesn’t solve this one.

NewsCorp Deal for Dow Jones All But Done: Now Done

Update: Pop the corks: Reuters

Reuters is reporting that the deal is done - then they changed their headline to 'deal expected Tuesday'. Assuming definitive agreement is reached at the DJ board meeting later today, Rupert Murdoch gets the biggest name in financial news reporting. Don't be surprised if we see him wrap the WSJ brand around his new financial news cable channel.

From the report:

"The Bancroft family has accepted," John Prestbo, editor and executive director of Dow Jones Indexes, told reporters in Chicago. He said Dow Jones "will be part of News Corp." Prestbo said the information came from an internal company memo.

New York Times: Murdoch Wanted it More

Simon & Schuster Report Strong Revenue Growth

They don't get a lot of play in the press release, but operating results for S&S were up sharply against the same period last year. For the first half, revenues were up 20% to $429mm and operating income was up 169% to $44mm.

For the quarter:

Publishing revenues for the second quarter of 2007 increased 14% to$200.3 million from $176.0 million for the same prior-year period,principally reflecting higher sales from best-selling titles, including Blaze by Stephen King writing as Richard Bachman and The Secret by Rhonda Byrne. OIBDA increased to $20.1 million from $10.6 million and operating income increased to $18.1 million from $8.2 million, reflecting the revenue increase partially offset by higher production and royalty costs.Publishing results included stock-based compensation of $.9 million and $.5million for the second quarter of 2007 and 2006, respectively.

Press Release

It may be no secret why the S&S results are so good. Assuming Bryne's book continues to sell into the third and fourth quarter and with the addition of ancillary titles, then S&S executives at S&S should be in line for nice bonuses this year.

Dow Jones Cliff Hanger

Apparently, things are on a knife-edge at NewsCorp. The deal deadline was set for Monday 5pm but not all the legal documentation was submitted on time. Murdoch awaits the news with increasing impatience and at the least it appears the margin of victory is going to be very close. Murdoch may win a significant portion of the vote but it looking for a major endorsement of the deal. Analysts suspect he is looking for more than 30% of the Bancroft shareholders to support the deal. Some insiders suggest he has this: With the stock price ready to tumble if the deal falls through - and the stock price fell 5% yesterday - some shareholders may cave and vote with their wallets.

Trib
Forbes: News Corp Unlikely to Proceed with Bid
Reuters
Forbes: The MySpace Guy

Pearson Profit Triples

Pearson posted revenue gains of 3% - up 6% on a constant exchange basis - and profit from continuing operations tripled from £14mm to £40mm for the first six months of 2007. Net income was lower for the period due to a charge of £123mm for the sale of its government services group earlier this year.

For the first half education revenues were up 7% and profit also increased. The company's earlier statements regarding revenue growth particularly in education seemed conservative especially given the add on acquisitions the company has made in the past 18mths. Regardless, some analysts were surprised that the company has raised its growth expectations for the total to between 5-7% driven in part by the strength of education.

Marjorie Scardino, chief executive, said:

"Our half-year results are always just a hint of our potential for the year, but
certainly a strong hint this year. The Financial Times Group is showing the
value of its unique strategy; Penguin's publishing and profit are both solid and
promising, as is its approach to change in publishing; and in Education we
continue to set the pace as we use technology to personalise learning

Scardino also said on the conference call that the company was not completely seriously interested in the WSJ meaning that they were never going to put cash into a deal or make a deal that would have diluted EPS. However, she also said that when a competitor is being sold as an executive she is obliged to review all options which seems to be what they were doing.

Pearson's share price went up 2% yesterday on the news. On the back of these results and the others in the past few days, the publishing and information business seems to be doing quite well.

Pearson PR
Forbes

Webkinz World: Trend-spotting in the Under-8 Crowd

The following post is by Susan Ruszala who is a freelance marketing consultant to publishing technology companies and was formerly responsible for international marketing activities for VISTA (now Publishing Technology Plc). She is an avid reader. You can contact Susan at sruszala@gmail.com.

Children often have as much to teach as to learn.

My 6-year old son has recently become enamored by Webkinz, stuffed animals that come with a password which opens the door to a virtual world where you can house, feed, dress, accessorize and amuse your pet (complete with playdates through online chatting) to your heart’s content. The site rewards usage through the accumulation of Kinzcash, virtual money earned through clever games (pseudo educational), online “jobs” and kids gambling in the form of bingo and slots. All of which allows your child to buy even more virtual items for their pet (or pets—link your rooms together for more fun!), including “rare” items in the Curio Shop, sale items or items which require a coupon. Cleverly scary, huh?

If you haven’t checked out Webkinz yet, and if your job involves even a tinge of digital-ness (for example, you have a computer), I advise you to logon today. Here are a few quick observations:

1. In Webkinz World, kids go online to the Reading Room to access virtual books with their pets and their friends—and I don’t see any complaints about format, metadata, reading devices or preference for printed matter. Kids don’t care how the content got there (and as adults they won’t either), and they are equally comfy curled up in their bed or a virtual couch.
2. Why aren’t there Webkinz books in stores today? Point #1 taken, there is still a market for printed Webkinz books which would extend the brand to bookstores and feed this current hot trend. I could see “Choose your Own Adventure” succeeding—combining static with dynamic content, which is what kids today are doing all the time with no trouble at all.
3. We know that the assault of content that exists today is just a dribble compared with what is to come. Ensuring that books stand out of the pack of potential media choices means being creative with how content is packaged, marketed and sold. Working with traditional publishing companies, I’d say it’s about 1 for 1 on those who are embracing new media tactics and those who insist that “it won’t work for our titles.” What do you all think?

I don’t know what Webkinz plans to do with their captive audience—or what I will have to pay to keep my son’s outdoor play yard (1000 Kinzcash) after the one-year trial—but I’ll probably do it. And though I don’t like the hyper-consumerism promoted by the site or the hysterics to be “in or out,” I have this vague awareness that the deftness he’s picking up clicking and buying and chatting and multi-tasking—well, that’s something I could learn from him.

Thomson Learning Name Change

Thomson learning will change their name to Cengage as of the end of August. The company HQ will also stay in Stamford as expected.

PR Newswire (As yet, not too much circulation on this story).

"Increasingly, our customers recognize that their success depends on being constructively engaged with others involved in teaching, learning and research," Ronald Dunn, chief executive officer of Thomson Learning, said in a statement. "The name Cengage Learning reflects our commitment to promoting engagement and improving results for all of our customers."

The company also emphasized that they will continue to leverage the stable of strong "brand-name" imprints such as Heinle, Gale, Wadsworth, Delmar Learning, Brooks/Cole and South-Western, among others.

Hachette (Lagardere) Reports

The US and UK arms of French media company Lagardere helped the company to grow revenues 7% for the first half. Lagardere is now a $10bill (approximately) company with interests in media and defense. From pr-inside

Lagardere's publishing division saw revenues up 11 percent to E897 million(US$1.23 billion), with the Time Warner Book Group providing a E82 million(US$112.7 million). The unit was not consolidated into the company results until April 2006.On a like-for-like basis, the publishing division's revenues rose 1.7 percent. Lagardere said the division's second-half revenue growth will be hit by weak sales in its French literature and Larousse dictionary businesses.

Lagardere's publishing units operate in Spain (Education), France (literature and education), the UK (Hodder) and US. Publishing revenues without the US only rose 1.7% and reflected conditions in France (market issues) and Spain (timing). The company press release did note strong growth in the US due to title growth.

For their outlook for publishing they noted the following:

The 2007 second-half prospects for Lagardère Publishing are good, especially for Education in France and Spain (where the effect of publication timing differences is set to be recouped in the third quarter) and for Literature in the United States. However, sales growth will as expected be dented by weak sales in Literature in France (a low-margin business) and at Larousse(elimination of loss-making editorial lines).

Businesswire

All in all a strange combination of assets when it is stated in black and white. In the US it is all the rage to de-comglomerate...one wonders.