Borders Down Under

As reported before, final bids are due by the end of the month for the Borders store operations in NZ and Australia. Bids are expected to be in the A$80-100mm range with Private Equity Partners the owner of Angus & Robertson the presumed front runner. Some serious contenders are already reviewing the books and according to this article from the New Zealand Herald there may be more than one or two candidates. Already mentioned were PEP and Berkelouw Books (a small book company), and now Dymocks the other large bookseller in the marketplace has confirmed it is looking to make a bid. Additionally, Woolworths and Paper Plus, a PaperChase like franchise operation, may also join in. This additional interest must be good news to Border's US who need to get a high price for these operations to mitigate the disappointing sale of the UK operations. Also noted in the article is a suggestion that Borders Australian management may have backed off a management buyout in order to align themselves with one of the purchasers most likely PEP.

Riverdeep Rumor and Reed Elsevier "Buy"

A curious note from Usman Ghazi of Dresdner Kleinwort who, in the process of recommeding Reed Elsevier as a buy - with a target price of 780p - takes note of rumors suggesting Riverdeep risk "either not securing the bank funding required to finalize the [Harcourt] transaction or going bankrupt in the intervening period, leaving the deal unfinished." He dismisses these rumours and I can't find any other suggestion of these issues so how much of a concern are they?

Borders CEO Jones Buys 50,000 shares

Nothing speaks to committment than dipping into your own pocket and putting your money where your mouth is and that's exactly what Borders' CEO George Jones has done with his purchase of 50,000 shares. While Borders' hit a long term low after their recent earnings announcement this endorsement may both shore up the share price and let investors know that senior management believes the future looks good for Borders. This purchase was one of the largest single purchases of Borders' stock in recent years. The purchase cost over $660,000 and as a result, Jones owns over 121,000 shares.

In related news, the company also annouced a fulfillment agreement with Baker&Taylor for support of the to be launced Borders.com retail site.

"We selected Baker & Taylor as our primary fulfillment partner because of their excellent track record with consumer-direct fulfillment of all of the product types we'll offer at Borders.com, and their ability to serve our customers in the superior manner they deserve," said Kevin Ertell, vice president of e-business for Borders Group.

"We are delighted to be Borders' fulfillment partner for book and entertainment products" said Richard Willis, CEO, Baker & Taylor, Inc. "We look forward to working closely with Borders on this exciting initiative and providing their customers with the world-class fulfillment services that are a standard of B&T."

In the same announcement, the company formally annouced the beta for the new retail site with some description of the site's features.

One such feature is the Magic Shelf(TM), which Borders has been testing on the beta site for over four weeks. The Magic Shelf is Borders' unique online version of the warm and engaging shopping experience that takes place in its bookstores every day. When arriving at the site's home page, customers see a realistic looking, three-dimensional shelf of actual book covers displayed as they would be in a Borders store. For details on each title, customers simply click on a book that interests them, much the way they pick up books that catch their eye in Borders stores. Over time, as customers shop at the future Borders.com, the Magic Shelf will become personalized for the shopper based on past purchases and will display books that the customer may be particularly interested in exploring. On the beta site, there is a related Magic Shelf feature called "Picked for You." Customers simply indicate the subjects in which they have an interest, and Borders will stock the "Picked for You" shelf with books on those subjects.

Penguin Lives in Whyville

Mediapost has an interesting post about the virtual world whyville and how the site is being leveraged by Virgin, Penguin and the University of Texas Health Science Center. The virtual world has over 2.4mm active users between the ages of 8-15 and is billed as place where children can gain an understanding and appreciation for math and science. It is also a place where companies can advertise there products as long as the advertising is 'active brain advertising'.

Here is what Mediapost said about Penguin's activity:

For Penguin Books' kid-friendly adaptation of Al Gore's "An Inconvenient Truth," Whyville created an entire Global Warming program--complete with in-world climate changes and tropical storms. Kids were able to band together for community clean-up activities after a storm trashed the Whyville beach, and take CO2 and temperature readings of the island at the Penguin-sponsored Climate Center. Almost 400,000 members visited the Climate Center within months of its launch at the end of June.

Foreword Magazine

Foreword magazine asked me to blog for the which I have been doing for the past four weeks. Most of what has appeared there is content from PND but Competitive Writing is something new. You may also like the new Foreword website recently redesigned.

Media Deals Keep Getting Better

The Jordan, Edmiston Group released their quarterly press notice on media deals and the results keep getting better and better - if you are selling. Amidst general worries about personal retirement accounts (mine) and decreased real estate valuations (my ex-neighbor but they deserve it) here we have our industry's bell weather shooting through the roof. JEGI tracked 637 deals and $95billion in value for the first three quarters of 2007 and they say deal value has already far outstripped the total value for all 2006.

JEGI tracks 11 industry segments and the leading segments were Marketing and Interactive Services and Online Media. In both segments the number of deals were up over 50% and the valuations were also up over at least 50% versus 2006. While there were a lot of deals in these segments they were 'small' compared to education where several very large deals resulted in a valuation increase from $387mm in 2006 to $14,239mm this year. There was a similar increase in Information Services.

Laggards in value included Business to Business media, consumer books and Directory and Reference Publishing.

You can read the entire release here.

EBAY Takes Charge

It was obvious to me in December that EBAY had either not purchased the right company or they had and had failed to execute with the acquisition of Skype. That's why in my (self indulgent) predictions for 2007, I suggested that EBAY would sell the unit. However, things are worse than that. With EABY's listings listless and core revenues a concern to business analysts, the company annouced yesterday that they made a mistake and overpaid for Skype and would take a $1.4billion charge in the third quarter. The purchased the company in 2005 for $2.6billion. Talk about dialing the wrong number.

There is still time for T-Mobile to step in.