Murdoch Gets Dow Jones

All media is now reporting the inevitable disclosure that NewsCorp has agreed terms with Dow Jones to acquire the company. Long live the Wall Street Journal.

Guardian
Telegraph

Media Deal Update From Jordan Edmiston

The JEGI group released their media and information industry market review this week. If you pay any attention to this market at all you shouldn't be surprised to hear the M&A market set new record highs with 399 transactions totaling $76 billion in deal value for the first half of 2007. This transaction value represented a 25% increase over the same period in 2006.

While there were many headline grabbing deals, JEGI notes that many more interesting deals occurred below the radar,

Major diversified media companies continue to reshape core models through acquisitions, and well-funded investors pursue new sources of growth. JEGI assisted with several such transactions in the second quarter, including arranging a $50 million investment for Gorilla Nation Media, the largest online advertising rep sales firm, from Great Hill Partners; the sale of Healia, an innovative heath search engine, to Meredith Corp; and the sale of TechnologyGuide.com, a provider of internet content sites for mobile technology products, to TechTarget.

The upcoming half year is expected to be as hot according to Tolman Geffs, a Managing Director with JEGI,

“There is a lot more consolidation ahead. There isn’t such a thing as old media anymore. There’s only diversified media. Every major media company is working hard to reshape their distribution model to reach new audiences, and that’s going to take years to pan out. Plus, you have an ocean of ad dollars moving from non-digital to digital.”

Increasing valuations have surprised many in the industry; however, with the continued availability of attractive financing and some large media companies radically changing their strategies and/or business models the continued volatility in the media market is expected to continue.

July Fourth:

It may be a little quiet here at PND for the rest of the week.

New Look Borders

The newish concept store in the Garden State Plaza in Paramus New Jersey seems more open and welcoming to me. They seem to have warmed up the colors especially the older beige color they had which had too much green in it and always made me feel ill. Under no pretence is this a revolutionary redesign and indeed Mrs PND, who is an interior designer, couldn't really tell the difference between old and new. When I pointed out some changes she did warm to the spirit of the excercise and agree the changes are better.

When Dutch retailer BGN looked to redesign their stores the consulted all manner of retail experts and research and not only revamped the physical look of the stores but incorporated technology behind the scenes to revolutionise the retail experience. That is the opportunity that Borders has but it remains to be seen whether they will reach a little higher than the ordinary.

Aborted Print on Demand

On Assignment:

I was curious. While I had attended BookExpo this year I had not taken the opportunity to examine the Expresso Print on Demand machine and when I heard that one was to be installed at New York Public library I thought I had to get a look at it. There is some debate about what the impact of this machine will be to everyday readers and some of that debate focuses on the final delivery; how useful will this be regarded if you are third in line and the process takes ten minutes. Are you going to wait? There is definitely something to that; however, the story of the Expresso is more about distribution and the opportunity to place more books where readers want to purchase them.

Some readers will remember the Sprout machine which Borders thought to place in their [stores and] distribution centers. They believed that via that machine that they could materially add to the inventory available to customers through their stores. Logistical and technical problems ended this experiment almost before it got started but it was surprising that it took so long for a new effort to come along. Sprout did sign up a number of independent stores to use their machine. Here are my notes from BookExpo 1999:

At the BookExpo show, a company named On Demand Machine Corp displayed a book printing system that can print and bind a standard trade paper back in a machine which measures eight feet by four feet. This machine is designed to fit in a bookstore and can both store electronic titles in its memory and call up additional titles from the company head office via satellite. Customers can order the books, confirm the title is the one they want and purchase using a credit card. The transaction takes a little more than five minutes. The first full implementation is scheduled to take place in June at The Tattered Cover in Denver. My guess is you will see similar machines at Kinkos, Airports and other public places in the not too distant future.

As Charkin says this current machine is too big and bulky, but when it gets smaller and less so there will be many more opportunities to leverage the benefits of this machine. Regrettably, my experience was problematic; I visited the NYPL on Saturday only to find the machine unattended and therefore out of reach. Forget anyone in line ahead of me - the place was deserted - and the NYPL desk person was next to useless. There was a printed card with information about the machine and its' smaller cousin and a log book for visitors to sign. I left my mark.

Many years ago while at Berlitz, I hit on the idea of selling our small format travel guides and phrase books out of vending machines. We struggled to get store distribution and I thought this would be a perfect way to place a 'store front' in non-traditional places where travel related traffic could be high but the retail options limited. Moreover, the machines could be moved around from place to place with less difficulty than setting up a traditional store or arranging store accounts and distribution. The genesis of this idea was Kodak's film vending machines. My point is that the Expresso needs to be this functional and 'ubiquitous' if it is to become an additional distribution option. In the meantime I guess I will give the Expresso another chance to impress me sometime in the next few weeks.

(Coda: the vending machine idea meandered: One of my colleagues at Berlitz suggested if she was going to put books in a vending machine she would put in Danielle Steele not a travel guide. This comment was doubly bad since I didn't really care for her - the colleague not Danielle. I did get some vending machine operators interested in the idea but then I left and went to PriceWaterhouse. And so ended the vending machine idea).

DADs Like Music

On the heels of last weeks post on Digital Assets Distributors in the book world, the NYT has an article this morning about a music world application,

TuneCore is a digital distributor that gets music into online stores, just as traditional distributors stock shelves at regular retailers. But Mr. Price (who also co-owns an independent label) does not take a percentage of sales, as most distributors do, nor does he provide the same marketing and promotional services as those companies. Rather, he charges a flat fee: 99 cents a song as an uploading and processing fee, 99 cents for each store where the act wants to place the album, and $19.98 an album each year for storage.

On The Hudson

It is not everyday that you see an outrigger canoe race in New York City. No idea who won but it is worth noting that I think these were crewed by girls.

I started humming the theme song from Hawaii 5-o and Mrs PND wondered what the hell I was doing.

Houghton in The Caymans

It used to be that opening a bank account in the Caymans was a rite of passage for the exceedingly wealthy but now even struggling multi-national publishing companies like Riverdeep are establishing accounts there to manage their treasury function. Oh, and to avoid 'onerous reporting' requirements in their home countries. According to the Irish Independent, Riverdeep is establishing a corporate presence in the Cayman Islands:

HMR, formed from Riverdeep's reverse takeover of Houghton Mifflin last year to create a $5bn (€3.7bn) group, is asking shareholders to approve the setting up of a holding company called Education Media and Publishing Group at an extraordinary general meeting to be held on July 9.

With more and more companies looking to establish a corporate structure in foreign lands - Bermuda (Stanley) and Dubai (Haliburton) and more companies considering going private because of current financial reporting requirements (SOX), Riverdeep is just another example of the trend.

The Independent has seen documentation regarding the scheme that will enable HMR to achieve more flexibility in dividend payments and also greater confidentiallity regarding corporate accounting.

"Irish law largely restricts companies to make such distributions out of realised profit less realised losses. The definition of profit available in the Cayman Islands is much broader and so allows for greater flexibility in making distributions out of share capital subject to limited restrictions," comments Barry O' Callaghan the group's executive chairman.

Net income seems to be more concept than precept down in the Caymans. According to the article, the company needs 75% of shareholder and High court approval. Currently they have exceeded the shareholder level (with O'Callaghan owning 48%) so it will be up to the High Court to approve. Doesn't seem in much doubt.

Apple ebook reader for iPod - What a Cool Idea

I found this link to a 'design proposal' that would combine an IPOD with a tablet like e-book reader. It is a pretty cool concept. Apple has been rumoured to be considering an ebook reader but nothing has materialized.

Publishers Fight Back - 2

I don't seem to hear too much about the Automated Content Access Protocol (ACAP), which is being developed by a group of content producers under the aegis of the World Association of Newspapers but they released a press release about the progress of the initiative. To refresh, the ACAP is new standard to allow on-line content providers to automatically communicate information to search engine operators and others on how their content can be used. From the press release:

• ACAP is building on existing technology including Robots Exclusion Protocol and is using established methods for defining standard permissions semantics.
• Collaboration and support for the project has been overwhelming: the list of 28 organisations continues to grow and represents a worldwide interest in the project (partners are listed below).
• Work is now underway to prepare ACAP for the post-pilot stage -- to hand over a long-term sustainable model to a pre-existing governance organisation or to set up its own ACAP governance organisation.

Effectively, the group is establishing a standard way to lock (or make available) the content on content providers web sites. This tool will allow publishers to select the content that they want crawled and thereby better control the access to their content. The tool is being developed so that when in place, a webcrawler will be able to read the permissions information and act accordingly. No human intervention required other than for the publisher to set the initial parameters.

“What we seek to do together is create the foundations for what is surely the highest aspiration that publishers, aggregators, search engines and politicians could have for the content industry - namely an increasingly healthy, profitable and vibrant sector which drives knowledge and diverse thinking throughout the internet and the world and which creates new opportunities for everyone," said Gavin O’Reilly, President of the World Association of Newspapers.

One hopes it is all not a bit late....

Prior Post

Pearson Education Announce Student Advisory Board

Speaking to your customers is always a good idea and Pearson have determined consulting with a divergent group of college students will give them some insight into electronic texts, e-learning and other new educational methodology. I suspect they will also be able to discuss issues around pricing and pricing methodology that have caused the educational market such angst over the past few years. From the press release:

"We believe an advisory board of college students will be an important catalyst in providing Pearson with a fresh, informed perspective about our educational content, technology, services and future learning models," said Will Ethridge, President and CEO, Pearson Higher Education, International and Professional Publishing.

The board consists of 12 students from across the country and each sits for one year. The group held its first meeting in Boston last week and furthermore, each student will work on particular initiatives and will be paired with a Pearson executive as a mentor.

Sandi Kirshner, chief marketing officer, Pearson Higher Education, International and Professional Publishing. "We have high expectations for the student board members and we are anxious to gain insights from their college experience."

The God Subject

The Guardian Newspaper in the UK has a short article on the success of books questioning the existance of (any) God. The article is specific to Christopher Hitchens book God is Not Great but also mentioned the sucecss of The God Delusion. I contributed to both authors royalty payment and finished The God Delusion but I haven't started the Hitchens book. I am currently reading Buddha or Bust and someone I had dinner with last night jokingly suggested I was in the midst of some mid-life crisis. Meaning aside, I will have beaten this theme to death by the time I have finished all three.

NYTimes: Hardly the Mike Wallace Treatment

Apparently, I am not the only one that feels that the New York Times' 'expose' on News Corp lacked any depth or provided new information on the manner in which Murdoch runs his business. (Paidcontent) You really have to consider the NYT's motives in this given they are themselves a family run operation similar to Dow Jones that has been left behind by the media revolution and they ran an editorial two weeks ago supporting the family's (supposed) wish to stay independent. It was more than disingenuous and perhaps in the interests of full disclosure they should have mentioned their own dual equity arrangement that keeps the Ochs/Sulzberger fully in control and the public shareholders out in the cold.

(As I may have mentioned, I retain some deep seated resentment towards Rupert Murdoch because as a 14 year old newspaper seller in Melbourne Australia they raised the price of the Herald from 8cents to 10cents and in the process did me out of a virtually guaranteed 2cents on every sale. That added a lot to my daily take and I soon realized that selling newspapers on a street corner was no kind of future).

Murdoch should get Dow Jones if for no other reason that he is willing to rebuild the franchise to compete in a new media, connected and multi-channel world. The Brancrofts aren't and I think that most people would like to see the Wall Street Journal retain and perhaps increase its influence and standing not just in the US but internationally. Murdoch has proven News Corp can manage and grow substantial media properties and Dow Jones will be no different. It is stupid to assume that any proprietorial media property is without bias or doesn't reflect some level of influence from the owner; but, customers (and staff) either support it or not and Murdoch (or the NYT) are not going to undercut the credibility of their properties to spite their revenue.

Everyone Needs A Dad

There was a good deal of joking about the acronym DAD at last weeks Klopotek sponsored conference on Digital Asset Distribution for publishers, but that did not take away from the content which showcased a number of providers in this space.

The conference was one part of a two part conference that presented a white paper Digital Asset Distribution for Book Publishers written by Mike Shatzkin (The Idea Logical Company) and Mark Bide (Rightscom Limited). The second part of the conference, which will deliver largely the same content, will be delivered in London next month at which time the presentations from both meetings will be made available. The White paper establishes the context for digital asset distribution:

But now, and rather suddenly, every book publisher is finding it has the need to manage the digital distribution of their content. The same set of content is needed by different people, in different forms, in different places and at different times, over and over again.

The white paper poses a number of questions which they later answer based on an extensive set of interviews with the key players in the industry. The pair interviewed companies in the US and Europe and publishers and a set of the predominate DADs. Among the questions they pose:

• When is it sensible for publishers to buy or build their own technical infrastructure?
• What are the risks of outsourcing Digital Asset Distribution?
• What functions currently managed by publishers might be rendered obsolete by a DAD?
• What is the relationship between Digital Asset Management (DAM) and Digital Asset Distribution?
• How much does a publisher need to know in order even to make use of a DAD?
• How does on line access to publisher’s content change both processes and accountability?
• To what extent have the leading edge professional and academic publishers been disadvantaged by their early entry into digital distribution?
• How many DADs do we need?

Presenting at the meeting were representative from Harpercollins, Ingram, Newstand, Bibliovault, codeMantra, CPI Publishing, MPS Technologies and Value Chain International. Each presentation was interesting in documenting the direction each company was taking in this arena. The comments by Bibliovault were especially on point for any one thinking about digital asset management:

1. Make sure you have access to your files at any time – don’t be reliant on the vendor to provide access
2. Don’t hand off the content and walk away expecting everything will be OK
3. Get your short term goals met
4. Be sure you can stockpile: a place to put the content even-though the content may not be released to the public

The full report can be found here and in about a month you will also be able to find the presentations.

BookExpo America Conference: Podcast

Many of the conference sessions at BookExpo were taped for Podcast as was the session I hosted.

Here is the link.

This session provides an overview of the social networking activities of various publishers and provides a window into their motivations, successes and expectations. It is hosted by Michael Cairns, founder of Information Media Partners. Speakers include Michael Hyatt of Thomas Nelson, Carrie Kania of Harper Perennial, Jim Behrle of Overlook Press, Karen Christensen of Berkshire Publishing and Malle Vallick of Harlequin.

Pearson, GE and Dow Jones

While Pearson has not admitted engaging in any discussions there is much too much noise about this possible deal for nothing to be going on. The Independent has an article this morning which examines how the deal may be done that enables Pearson to retain earnings growth and return rates that they have promised shareholders.

So Pearson has been casting about for a partner, with the latest mooted structure being a joint bid with GE, the outcome of which would be a joint venture where the two own equal shares of 40-45 per cent and the Bancroft family retain a stake of 10-20 per cent. GE would put CNBC into the joint venture, Pearson would put in the FT and possibly some of the other assets from the FT Group, which also owns The Economist and a host of specialist financial magazines and databases. One or both would also have to contribute some cash so that the Bancrofts and Dow Jones' other shareholders could get something close to Mr Murdoch's $60-a-share for their holdings.

The odds are still with NewCorp but it looks like being a far more interesting process than it looked two weeks ago.


UPDATE: Bloomberg

GE and Pearson have dropped their discussions on a potential bid for Dow Jones. The odds are even more in favor of News Corps bid and the market agrees. The stock price for DJ has settled at the offer price.

News Corp Discusses Combining MySpace and Yahoo

An interesting story in this morning's London Times that suggests that News Corp executives and Yahoo have discussed the combination of MySpace with Yahoo. News Corp would retain approximately 25-30% interest in the combined entity. With the departure of Terry Semel, the discussions could die a quick death but with the massive strategic issue that Google poses to Yahoo the company must be thinking that organic incremental growth is not going to cut it and that they will need to construct more than one major deal to both build momentum and compete aggressively with Google. The combination with MySpace is certainly interesting but if you coupled that deal with a merger with EBAY - which also has its Google problems - and suddenly you have a legitimate antidote to Googleness.

EBSCO Acquire Some ABC-Clio Databases

Ebsco announced yesterday an 'historic' agreement with ABC-Clio to acquire two of ABC-CLIO’s renowned databases, Historical Abstracts (HA) and America: History and Life (AHL), and will distribute eight additional award-winning history databases in addition to ABC-CLIO’s online history eBook collection, History Reference Online. EBSCO continues to add content to their concentrated 'silo' offerings which makes them the number one source of affordable academic reference material.

From the press release:

Tim Collins, President of EBSCO Publishing, said: “We are extremely excited about this partnership. Our relationship with ABC-CLIO will enable expanded access to some truly remarkable resources. As always, we remain committed to adding value for librarians and researchers in the research process.” Collins continued: “As a company that remains committed to growth, and one of the largest licensors and digitizers of content in the world, we are delighted and honored to be able to work with ABC-CLIO to enhance and expand history resources for teachers, students, and scholars.”

Gary Rautenstrauch - New CEO SirsiDynix

Vista Equity Partners appointed Gary Rautenstrauch the new CEO of SirsiDynix as of this weekends ALA conference in Washington DC. Gary was last at AMS and had been hired to sort out that mess which developed into a much larger problem than most people realised. Most people in library land will know him from his time at Baker & Taylor. He replaces Pat Somers who left Sirsi after Vista Equity invested.

Press Release

Google Interiors - All too possible

Does Google know no bounds? Maps were one thing, digital pictures of your streetscape another. Can it go even further? Well, Sandra Niehaus thinks it can:

“I’m Dierdre Martin and this is George.” She didn’t fill in George’s last name,
but they both held out their hands and I shook them. I realized with a shock
that George’s hat was a dense cluster of tiny cameras, forming a rounded beehive
of angled, glittering eyes. “We’re from Google Interiors, a new venture
sponsored by Google to make every home interior in the world searchable on the
internet.” She paused and took in my doubtless stunned expression. “You know,
Google, the internet search engine?” she clarified helpfully.

Read the entertaining post here.

(Tip of the hat to Exact Editions).