The Year In Reading 2007

I barely purchased any books this year; however, I managed to read over 20 titles. Around this time last year, I rearranged my book shelves to place all the unread books on one shelf. I was more than a little surprised to find I needed two and a half shelves (or six and a half feet). So, I determined that I would aggressively winnow the back log down before I started buying again. Success of sorts then in the number completed. I have selected the easier titles to read and the next 20 titles will be tougher.

I was anticipating a hard slog through McCullough's John Adams but this was my personal favorite of the books I read this year. It was especially rewarding to be half way through it when Romney (Presidential hopeful) explained on Meet the Press how Adams would have agreed with him that you can't have freedom without religious morality. That was certainly not my interpretation of what Adams believed. Another notable nonfiction title I enjoyed was Overthrow written by NY Times reporter Stephan Kinzer. Kinzer takes the reader through all our foreign affair blunders from Hawaii to Afghanistan showing how the country and the leadership keep repeating the same mistakes time after time. He shows, using before and after comparisons, that the US involvement had appalling results for the citizens of the countries in question. Naturally, there are highly appropriate references to the current Iraq incursion. Rounding out the top three non-fiction titles was Dawkin's The God Delusion which I found immensely enjoyable. Just knowing our smirking, giggling, singing the wrong lyrics and generally clowning around during required weekly chapel at Melbourne Grammar School is not going to get me in trouble in the hereafter is enough for me.

Fiction. The Night Gardener (Pellecanos), One Good Turn (Atkinson) and Bangkok Haunts (Burdett) were my top three reads this year. Pellecanos sets his crime dramas in Washington DC and this one has the same tight character development and story line. Mrs PND has read Atkinson and I picked this up on her recommendation: She is as good a crime writer as you will find and I look forward to reading her other titles. Burdett launched his Thai/American protagonist about three books ago and he improves with each successive title. I also met the author at the Strand this year which is an added bonus. Read his books to understand more about Thailand and Bangkok generally. Of note, Burdett comes up with some of the most elaborate killing scenarios you will ever find.

Other notable books were Perry Garfinkel's Budda or Bust and Patrick White's A Fringe of Leaves. White won a Noble and is one of Australia's greatest authors. This title sat on my parents shelf since it was published (1976) and I decided to read it based on some controversy reported regarding the current state of Australian literature.

Here's looking forward to another year of reading.

A Year of Reading at The Millions

Graphic Realities

I wrote a post last week about Graphic novels related to an article that appeared in the Philadelphia Inquirer. My post generated this comment from Van Allan and it is a post in and of itself about the developing graphic novel marketplace:


It is amazing to see how much the medium of graphic novels have grown over the past 20 years. And it's been fascinating to see Hollywood come calling. However, I do believe quite strongly that there are some major barriers on the distribution side of things that have inhibited this growth and have prevented comics from growing as much as they could. The main issue isn’t in the book trade, however, but rather in the Direct Market (the “comic shops”).

Diamond's monopoly on the Direct Market has become far too onerous for any of the non-brokered publishers. It boggles my mind that so many of these publishers signed exclusive distribution deals with Diamond that have really gotten them nothing at all. Diamond will still not take an inventory position on titles and "out of stock" titles become defacto "out of print" in many, many cases. Getting re-orders flowing through Diamond in a way that I'm familiar as a bookseller with would seem to be nearly impossible. From this point of view, Diamond is not a distributor at all, but rather a freight-forwarder. And since they are the exclusive supplier in the Direct Market, they really are the only game in town. Certainly the ability to use just-in-time inventory management is a major problem on the retail level as a result of this. Factor in low discounts to retailers and you have a situation that leads to conservatism in ordering. It is fascinating to me that a title like Persepolis performed so much better in the book trade channel. I think the same can be said for manga.

Just to drive this point home even further: it is no surprise to me whatsoever that both Fantagraphics and Drawn & Quarterly have set-up retail operations (in Seattle and Montreal respectfully. The distribution situation is fundamentally untenable as it stands right now and publishers are trying to find alternatives. This all means that if a small press title (and really, that means anything published by anyone save for Marvel, DC, Image and Dark Horse) has small initial orders from Diamond, growing sales long-term is almost impossible. A title is dead right out of the gate.

In my own case, I know that if I tried to launch my graphic novel through Diamond tomorrow I'd be facing initial orders of no more than 300 copies. I'd be looking at re-orders at only another 100-200 if I was very lucky. Even if I managed to get into Ingram, Baker & Taylor, Bookazine, North 49, etc..., orders would most likely be very poor. Printing 1000 copies of my graphic novel is about the minimum I can shoot for with offset printers like Lebonfon. I suspect the odds are long that I'd sell that many over the course of a year.

I think this partially explains why so many graphic novelists are turning to the web and trying to gain traction that way. It certainly does in my case. While I think the diversity in what is being brought to market is truly amazing, I suspect we’re heading towards a schism between the two channels (if we’re not experiencing it already). And that is a somewhat scary proposition for those of us trying to earn a living in this medium.

Predictions 07: How did we do?

This time last year I made a number of predictions and I was less than accurate and as a prelude to looking at what may or may not happen in 2008, I thought I would revisit these. (Current comments in italics).

NYTimes will eliminate the Saturday print edition of the newspaper. It will also create local web news sites for every major metropolitan city in the US and will stream video from their owned broadcast television stations, classified advertising will be free. The company will also launch a citizen’s paper: The New World Times. NYT will create suite of news gathering tools – web services – and make available to ‘citizen journalists’ content and research traditionally only available to professional journalists

Some media prognoticators are suggesting that one of the top 100 US dailies will make the move to eliminate a Saturday print edition sometime in 2008. The NYT is at the same time too conservative to try anything so radical but also without motivation that true public company ownership would insist on.

YouTube tv: Just like America’s funniest home videos we will see a TV show based on original YouTube video content. It will win its night by 10% and will be turned into a weekly Saturday night talent show.

Didn't happen but we did see some excruciatingly scripted YouTube insertions into one of the Presidential debates. We also saw content owners get very angry at Youtube during 2007.

Using cell phones’ camera as a barcode reader will lead to an explosion of mobile in-context/ in situ mobile advertising – followed in 2008 by RFID based in-store advertising (with software for cell phones). Mobile advertising will surpass 5% of all ad dollars spent by agencies by end 2007. (Web currently at 20%)

Not sure about this one. I think more will happen here in 2008 but mobile is not quite ready for prime time. We did see the immense growth of Twitter which wsn't on the radar 12 mths ago. Integrating an ad model somehow here will be a big deal perhaps by 2009.

Google launches product placement advertising program. Based on similar key word algorithms advertisers will bid for placement in movies, television, other broadcast, ports, etc. prior to production and/or live telecast. Program will represent 10% of all fall 2007 upfront spend. FCC will hold hearings on standards related to product placement advertising in late 2007 as the market explodes

Didn't happen but Google expanded their grip on the advertising space with numerous acquisitions including Doubleclick. Despite their size they still only represent a fraction of the potential ad market. See them grow....

Apple will think about buying Disney and Electronic Arts but will buy Tivo and slingBox. Apple will also launch a Beatles version of the I-Pod including the entire Beatles catalog plus video/movies. The Beatles I-Pod will retain the tradition Apple artwork (Green apple front, cut away apple on the back). Yahoo will by EA and within six months launch a social network gaming site based on EA content

Tivo has re-established its self and is now selling its technology to companies they once viewed as competitors. The company seems stronger than it was 12mths ago. Slingbox was acquired by Echostar (Sat provider). EA will be wondering about the big combination in their space of Activision and Vivendi but they have aggresive themselves and is likely to remain independent.

Yahoo continue to have their problems and haven't established a breakout strategy after Jerry Yang took over 12mths ago.

Hard to believe we don't have a Beatles section on iTunes. We do have Led Zep.

No-one will buy Netflix.

Got this one right

Social Media in Education: Several major US colleges will teach various social science courses entirely in simulation. The courses will not be taught in traditional lecture form but entirely within the software simulation.

There hasn't been too much movement here and the biggest news in education were the ginormous monies spread around to acquire Thomson and Harcourt.

News Corp will buy Dow Jones and Financial Times and sell Harpercollins and Hachette will by Harpercollins.

One right. HC may yet be sold in 2008

EBay will by Linden Labs (Second Life). Within six months they will integrate Ebay selling tools into SecondLife enabling virtual store fronts, sales assistance and virtual trading. Will launch program with major retailers and create first Second Life mega-mall in cooperation with Westfield. Ebay also launches SecondLife media placement agency to handle all media inventory on SecondLife. T Mobile buys Skype from Ebay. Linden dollars will be included in the Feds M1 currency calculation.

Ebay has seen continuing deteriorization in revenues from their best customers. The company spectacularly recognized how bad the Skype acquisition had been by reducing its book value by half. Will they sell Skype? If they do it will probably not occur until they have a new CEO. Second Life had some problems: they were hacked and lost some customer information and during 2007 growth has slowed. Hard to know where this will go.

Neil Young’s Living with War wins the Grammy for best Rock Album.

Lost but still an awesome album.

I will revisit predictions for 2008 next week.

NYC Christmas

Created with Admarket's flickrSLiDR.

I'm experimenting with this photo viewer thing. Not too sure about it. Each image has a comment but it is not obvious.

BBC: A Whale of a Story

The BBC have chosen to cover the Japanese whaling fleet in the South Atlantic by sending a reporter named Jonah Fisher. Some wag suggested it must be a send up but sure enough I saw him on the news last night. I wonder what amount of ribbing he is getting from the crew.

Year in Stats & Popular Posts

By way of thanks to all my loyal readers I thought I would list some of the stats for the blog. I am not sure how 'auditable' these stats are but between google/analytics and feedburner there is some consistency. Currently I have nearly 800 subscribers via RSS and over 100 via email. During the year I had approximately 30,000 visits which resulted in 45,000 page views. On average, those who browsed the content spent 2.25 mins per page. Nearly all of this growth happened since May.

The top label (subject) was 'thomson'. Rounding out the top five were playboy, future of biblio, Harcourt and Educational Publishing. Seasonally, I had my heaviest traffic during the summer when the education publishers were in play. Thomson, Harcourt, Houghton, McGraw Hill and OCLC all provided the most traffic other than that delivered via commercial operators like Comcast, Roadrunner, etc. Top referring sites included the normal suspects: Google, Blogger, Technorati. Additionally, I thank Charblog, Eoin Purcell, Exact Editions, Schlagergroup, Bill Trippe, Lorcan Dempsey, Ed Champion, The Millions, Gladys Bembo , Teleread and PW for their support. (I don't do enough to return the favors and I hope to do better).

The most popular blog posts were:

Amazon & Self Publishing, Headline Guaranteed to Get Attention, Penguin Sued over Dot Parker, High Voltage: Australian Publishers Upset, Five Questions with Rosetta Solutions, Harpercollins reports Higher Revenues, .epub: What it means for Publishers, Endorsement for PND, Scholastic, the future, Five Questions with Lonely Planet.

Perusing my traffic reports, I always notice the 'Hilton hotel' or 'Marriott' network ids and think some poor shlepper is on the road and all they want to do is read my humble blog. Well, thanks to all of you stuck in some bland hotel getting your Personanondata fix. I appreciate it and I've been there myself.

The network addresses throw up other interesting items such as spelling mistakes. It always makes me smile when I see my friends from "Nielson" have come to visit. I always say, one thing you should always be able to do correctly is spell your name.

Search strings are another source of (my) amusement. Here is a sample of actual searches that landed on my site from the past 30 days:

“non german or non chinese customer who engage in electronic commerce”
"Motor Mouth barnsley”
"who is an actor"
"supply chain for a gym”
"2007 2008 email contact of chear holders in france @yahoo.com”
"Mr. Katz is in the widget business. He currently sells 2 million”
"escorting for dummies”
"Local news on the 7 October 1997 in London”

While for obvious reasons I hope these people left my site disappointed there is a reason I look at these queries because they often throw up leads for blog posts.

I hope next year is even bigger. Thanks for the support and please tell colleagues, friends and family members about the site.

HarperRandomCollins or RandomHarperCollinsHouse

Well why not? If Forbes and CNN Money have the same short note suggesting that Bertelsmann is going to buy Harpercollins for a $1.obillion then why not Personanondata? On the suggested deal itself, I am sure Hachette would have something to say about that. Or any media PE oriented group. Maybe CBS would carve off S&S for a combo with Harpercollins. Even the FTC would weigh in once all the booksellers reacted. Anyway, Harpercollins denies any discussions are taking place: But they would wouldn't they. Reuters.

This could make for an interesting new year. With Harpercollins' recent financial performance not comparing well with their own high standard and News Corp's expensive purchase of Dow Jones perhaps there is something to this. On the other hand, Bertelsmann already have a $1billion trade publisher and strategically would they want to invest a $1.obillion in a business with slow (if any) revenue growth and low margins. A better solution, would be to invest in an information business that in the right segment would see fast revenue growth and margins greater than 20%. We will see.

On a related note, Bertelsmann confirmed again that they have no intention of sell Gruner + Jahr. Bloomberg.

Scholastic Beat Estimates

Scholastic reported second-quarter profit above analysts' estimates, helped by revenue and profit growth in their International segment. The company also announced they are divesting the direct to home continuity business. From the press release;

Revenue in the second quarter was $746.2 million compared to $735.5 million in the prior year period, and net profit was $75.6 million versus $75.1 million. Earnings per diluted share rose to $1.93 from $1.75 in the prior year period, primarily reflecting accretion from the previously announced $200 million accelerated share repurchase. In the quarter, Direct-to-Home Continuities contributed revenue of $33.2 million and resulted in a pro forma net loss of $6.1 million or $0.16 per diluted share, based on the Company's normal effective tax rate of 37.0%; this is compared to revenue of $38.1 million and a pro forma net loss of $2.8 million or $0.06 per diluted share in the second quarter of fiscal 2007.

"In the second quarter, Scholastic's businesses, excluding Direct-to-Home, performed on plan, and the Company's operating income and margin improved year-over-year," commented Richard Robinson, Chairman, CEO and President. "Profits from School Book Fairs, Clubs and Trade Publishing all rose, while Scholastic Education made progress investing in a reorganized sales force, increased technical support and consulting services, and new technology products. In addition our International segment recorded double-digit revenue and profit growth."

The company has retained Greenhill & Co. and has begun the sales process and will also report direct to home as discontinued operations.

The company maintains their full year revenue forecast of $2.3 to $2.5 billion and earnings per diluted share of $2.35 to $2.85, noting that they expect the solid performance in their core businesses to offset the lower than expected results from Continuities. Full year net income may be impacted by write-downs associated with the sale of the business unit but there is no expectation that cash flow will be adversely impacted. The company also announced a modest stock repurchase plan and is authorized to purchase $20mm of its common stock.

Highlights:

• Harry Potter's boxed set helped the consumer segment to achieve flat revenue and profit
• In education, revenues were flat with prior but operating income was lower due to planned investments
• Large gains in international revenues and profits offset declines in other segments.
• Revenues were up 13% and profit up $4.5mm (22%)

Philadelphia Graphic

The Philadelphia Inquirer (philly.com) has an overview of the the growth of graphic novels and the accelerating relationship with movie productions from these works:

The genre's success has carved out new bookshelf space in bookstores, and caused Hollywood to come calling: In addition to Miller's Sin City and 300, recent movies such as V for Vendetta, Road to Perdition, and A History of Violence began as graphic novels. The holiday season brings the animated film version of Marjane Satrapi's Persepolis, about girlhood in Iran after the fall of the shah; Satrapi served as codirector. Satrapi lives in France, a nation where graphic novels have been a respected form for decades. In Japan, the bulky comics known as manga are read by businessmen on the subway. In many ways, America has embraced its graphic novelists a little late. Even so, the genre's success is due to its global appeal, Mahoney said. Graphics with straightforward dialogue enable the medium to simplify complex issues and cut through language and cultural barriers at the lightning speed of the Internet.

The article orients itself around an exhibit at the Norman Rockwell museum in Stockbridge MA. which is described as 'captivating'. I will do what they didn't which is to link to the exhibition which runs from November 10 - May 26, 2008.

LitGraphic: The World of the Graphic Novel
A burgeoning art form with roots planted firmly in history, graphic novels, or long-form comic books, have inspired the interest of the literary establishment and a growing number of readers. For today's aficionados, graphic novels, with their antiheroes and visual appeal, are positioned to usurp the role that the novel once played. Focused on subjects as diverse as the nature of relationships, the perils of war, and the meaning of life, graphic novels now comprise the fastest-growing sections of many bookstores‹an accessible, vernacular art form with mass appeal.

Reed Business Expect Slower Growth

Reed Business Chief Executive Gerard van de Aast spoke to Dutch daily De Telegraaf (via Reuters) and indicated that revenue growth in 2008 could slow due to continued weaker US dollar rates and a general economic slow down. He did confirm that results for 2007 show significant improvement over 2006 with internet revenues up 25-30%. Naturally, since the discussion was in the Netherlands he was asked about a proposed merger between Reed and Wolters Kluwer which he dismissed as pure speculation. He indicated that on paper it could make sense but culturally the two companies were not compatible.

Quebecor in Strife

Quebecor's CEO resigned on Monday in the wake of a failed recapitalization several weeks ago and on the heels of the collapse of their deal to sell their European printing operations. There is now heightened concern that the company could become insolvent in the short term unless their existing banks or primary shareholder provides some additional short term liquidity. There may be little expectation from the banking sector both because the company's access to revolving credit was reduced recently and analysts expectations that Quebecor will miss their liquidity covenants when they announce their next financial results.

Predictably, the markets have identified parties that could be circling the sinking ship and these include Donnelly and Transnational (Transnational have said they may only want parts) with some private equity companies for good measure. Another option is for Quebecor's primary shareholder Quebecor Inc. (35% of shares and 84% of voting) to take the company private. Certainly, if Quebecor Inc, stepped in they would want some assurances but their shareholders may not be happy with any type of rescue. Quebecor Inc's shares also dropped on news of Quebecor's problems.

From The Globe and Mail:

The company was once a money-spinning jewel in Pierre Karl Péladeau's Quebecor Inc. media and printing empire. Now, it is viewed as a drag on Quebecor, which has to decide whether it wants to throw it a lifeline or cut it loose by selling it or letting it fend for itself. At this point, it appears less likely that Quebecor World's banks will want to extend credit lines after having recently lowered the credit facility to $750-million from $1-billion, National Bank Financial analyst Adam Shine said in a research note. There would have to be assurances of help from parent Quebecor, but coming to the printing subsidiary's rescue appears "increasingly burdensome and certainly wouldn't sit well with [Quebecor] shareholders," he wrote.

While the sale of the European operations would not have generated a significant (less than $50mm) gain it would have eliminated a loss making drain on the company's resources. Coupled with the loss of their CEO (sixth in four years) and the failed recapitalization, Quebecor shareholders have bailed. Quebecor was at one stage the worlds largest commercial printer but failed management and misguided strategic leadership has left it light years behind industry leader Donnelly.

Cancelled: Lynne Spears Parenting Book!

Is it really a surprise that Lynne Spears book on Parenting that was to be published in 2008 has been cancelled? Thomas Nelson is saying it has been delayed not cancelled. Perhaps she can rethink this as "Lynne Spears: Grand Parenting for Dummies."

Replacing Harry in 39 Steps

Scholastic will announce a new publishing program that they hope will replace the Harry Potter franchise. In this case, they will retain all rights to the intellectual content so while traditional published product may not reach the heights of success that Harry did, Scholastic will be able to leverage the content in a much broader fashion than the Potter series. Rowling retained most rights to negotiate directly with other third parties such as movie producers without having to pay Scholastic or Bloomsbury a percentage.

From the NYTimes:

The series, to be officially announced by Scholastic on Tuesday morning, will be aimed at readers 8 to 12 and offer mystery novels telling the story of a centuries-old family, the Cahills, who are supposed to be the world’s most powerful clan. According to the books, famous historical figures ranging from Benjamin Franklin to Mozart were members of the family. The plots will revolve around the race by two young Cahills, Amy, 14, and Dan, 11, against other branches of the family to be the first to find the 39 clues that will lead to ultimate power.

Scholastic intend to make non-print publishing a key component of this program recognizing that not only is print less appealing to younger readers but that the web related product could actually create a larger more compelling product.

As a side note, I thought it curious that NYT has chose not to place this story in the media & advertising section of the times but in the Arts section. Seems to me that this is both: Certainly from a business perspective, replacing Potter revenues at Scholastic will be of interest to the business community.

Reed Elsevier: How to Expand a Market

Professional publishing companies are leading the industry in the transformation from a print single volume paradigm to an integrated, unified platform approach to content delivery. This latter approach combines the integration of content across categories with third party content and the integration into/with client workflows. Leading the charge are companies such as Elsevier, Kluwer and West each of which are investing significant amounts in electronic delivery of content. This investment goes beyond simply digitizing and indexing their content to building applications, webservices and supplemental databases that materially improve the productivity of their clients work environments.

This weekend TimesOnline discussed the impact this strategy was having on Reed Elsevier with CEO Sir Crispin Davis:

Davis said that the shift, which has taken place in the past 18 months, was “a natural but important evolution from print to online and then from online to workflow solutions”, Where possible, Reed is linking its own online platforms with a firm’s intranet, joining them at the hip. It is no wonder, then, that contract retention has gone up from 88% to 97% in science and is almost as high in legal. To a certain extent, the shift maps Reuters’ move from selling share quotes and news to more graphical data and research. But Reed has gone even further. For small legal practices, it will more or less run the office, providing administrative software that can track billable hours and keep a diary of court appearances.

Integration and the corollary understanding of the clients workflow is only part of the story. Using their content as their spring board, these publishers have radically expanded their potential market. In the article, Davis notes that they could be limited to participating in a $18billion market but in adding applications and services their potential market could exceed $48billion. Interestingly, when we discuss the size of the publishing market in revenue terms the boundaries will start to be much less clear as integrated products take hold.

Elsevier's experience and strategy is no less important for other segments of the publishing community. Education is the next publishing segment to adopt a platform approach to learning and leading this transition is Pearson. As I have commented before, this company has systematically acquired companies that now enable it to supply a broad array of products and services to the education community. The lines between content supplier and solutions provider are blurred as Pearson can provide content, assessment, remediation, school management applications and community solutions to their clients. Admittedly the sales process is likely to be more complicated; however, the market for Pearson's products is now radically larger, seasonality can be mitigated and their products can now be embedded in workflow and infrastructure. Switching costs are raised for the customer as a direct result of 'embedded' solutions which, while an obvious benefit for the publisher, also enables the publisher to maintain a consistent level of customer directed investment.

While Pearson has led this move in education in the last several years, the privatization of Thomson and Houghton/Riverdeep will result in these companies rapidly making up for lost time in the development of similar solutions for education. Providers like Elsevier have already identified a large new market for their products/solutions which will enable them to post annual revenue gains as they deliver radical new productivity gains for their customers.

Mike Huckabee's Message to Iowa

Noted on Chris Matthews this morning. Too funny.

LA Times: A Dismal Year (or maybe not)

The LA Times takes a retrospective look at the year in publishing and concludes it was just like the year before the year before.

"Books are news that stay news," Freeman said. "And because there's so much published, they need to be sifted for the public, to see what matters."Overall, as the publishing world looks back on 2007, it's hard to reconcile the unease people feel about the business with the excitement they feel about the books themselves. When he goes to publishing dinners, bookseller Doug Dutton said, the conversation swings between lamenting the state of the business and exclaiming joy over a new novel or history."It's about as murky a picture as I've seen," said Dutton. Then he amended that slightly: "Sort of like last year and the year before."

The newspaper also manages to speak to a publisher other than Jane Friedman.

Louis XVI: Let them Pay Shipping

The court at Versailles has ruled that Amazon.com is not allowed to offer free shipping on book ordered by French shoppearrs. From the NYT:

The action, brought in January 2004 by the French Booksellers' Union (Syndicat de la librairie française), accused Amazon of offering illegal discounts on books and even of selling some books below cost.

Amazon.com had no comment but they will be required to pay a fine of $150,000 to the booksellers union and are also assessed a fine of $1500/day for each day they retain the free shipping. Now I'm thinking this is a rediculously low amount if the court really intends to penalize them and stop them from providing this service. One would think this is actually good and in the interests of French consumers, mais non.

Assuming they care, perhaps this will go to the European court. As the article notes, pricing is highly regulated in France especially on books.

Sony BMG: Demerge?

The European Court of Justice could be on the cusp of upholding a lower court ruling that the 2004 merger between Sony Music Group and BMG should have been rejected. Guardian

"The Court of First Instance rightly held that there had been a failure to state reasons and a manifest error of appraisal in the Commission's decision", said Juliane Kokott of Germany, an advocate general for the European Court of Justice.
There is no date set for the ruling by the court. It follows the advice of its advocate general in a majority of cases.

The merger has actually gained approval twice - Sony-BMG returned a second time and won approval again last October - and this ruling effects the first approval. It is unclear whether the Court will have any say over the subsequent 10/07 approval but the plaintiff (Impala) may decide to appeal this second ruling as well. Aside from taking up significant legal time and expense the impact of this process has not been felt on the business. It is unknown what potential remedies would be required if the merger is ruled uncompetitive and not in consumers interests.

The impact on the European competition commission maybe more profound since the court is likely to question the process and objectivity of the commission in evaluating mergers. The lower court noted that significant issues were raised by the commission in the early stages of their review but they approved the merger anyway and left unresolved some of the key issues they themselves had raised. Perhaps the court will request specific changes in the operations of the commission to ensure that this situation is not repeated although these requests are unlikely to be binding. The role of the commission is to uphold consumers interests but it is also to help ensure that deals like these don't end up in court.

Reed Complete Harcourt Sale

Reed outlined its plans for a special shareholder dividend to distribute the proceeds from the sale of the Harcourt education unit. From Reuters:

Reed Elsevier shareholders will receive 82 pence per share while Reed Elsevier NV shareholders will get 1.767 euros per share. This will be accompanied by a share consolidation, which has already been approved, on the basis of 58 new ordinary shares for every 67 existing ordinary shares.

According to ABN AMRO analyst Paul Gooden (also quoted by Reuters) this is good news because some analysts were worried the deal could collapse. Post-sale, the consensus is that share performance will improve as the impact of Reed Elsevier's electronic publishing is more readily apparent. It was generally believed that Harcourt was a drag on the overall business.

Reuters

Borders Australia Decision Delayed

A few weeks ago the Australian competition commission asked for more feedback from the marketplace regarding the sale of Borders Australia. Given the length and specificity of the questions it is not surprising that they have now decided to give them selves extra time to review the responses. The anticipated delivery of their report is now January 30th rather than the previously announced December 19th.

Prior PND report

Reuters