After I ran an item yesterday about the acquisition freeze at Houghton Mifflin Harcourt, in which Publishers Weekly used the term “leveraged”, a related news item was brought to my attention. At a panel panel conducted at last October’s Frankfurt Book Fair, Lagardere Publishing’s Arnaud Nourry observed, “within the last two or three years some major publishing companies, particularly in education, have been acquired by highly-leveraged private equity funds…. I’m sure that within the next months some of these companies will have to sell some of the assets back…”

In light of yesterday’s news, Nourry’s prescience is quite remarkable.

Or is it more than prescience? Nourry, Chairman and CEO of Hachette Book Group, which owns Little, Brown and Grand Central among other holdings, finished the above sentence thus: “…and we’ll be there…to make these acquisitions.” If he, and we, are talking about the same highly leveraged major educational publishing company, he may have been hinting that he’s got his eye on Houghton Mifflin Harcourt.

Is there a white knight in the offing? Watch this page…

Incidentally, Nourry also had this to say on that same panel: “I don’t see the banks pushing Borders into bankruptcy in the short term, and I’m rather confident about the next six or nine months for these big accounts.”

From his lips to God’s ear.

RC

The Sunday New York Times Magazine of November 23, 2008 is called “The Screens Issue” and carries a number of brilliantly insightful articles about the media revolution of which we are all both active participants and hapless victims. The most arresting piece of all is Becoming Screen Literate by Wired’s Kevin Kelly and I can’t commend highly enough.

After more than five hundred years of domination by printed text, Kelly says, “Now invention is again overthrowing the dominant media. A new distribution-and-display technology is nudging the book aside and catapulting images, and especially moving images, to the center of the culture. We are becoming people of the screen.”

The collective mentality of today’s social networking generation – what Kelly calls the “hive mind” – is utilizing cheap and ingenious digital tools to produce movies, videos, anime, 3D computer models and other wonders. The “author” of these works is not an individual but, rather, a cultural community. It is even bigger than what the French call the auteur, the unifying human vision that infuses a motion picture. The hive’s human components do not necessarily know each other but contribute anonymously and selflessly to the creation of a media event that is not only greater than the sum of its part but possesses immense global reach and impact.

‘After all,” writes Kelly,

“this is how authors work. We dip into a finite set of established words, called a dictionary, and reassemble these found words into articles, novels and poems that no one has ever seen before. The joy is recombining them. Indeed it is a rare author who is forced to invent new words. Even the greatest writers do their magic primarily by rearranging formerly used, commonly shared ones. What we do now with words, we’ll soon do with images.”

RC

Most authors have a simplistic notion about how books are marketed and sold to the movies. Their impression is that it their literary agent, operating alone or with a Hollywood co-agent, submits a book to producers until he finds one who likes it enough to make an offer, the same way that book agents submit manuscripts to publishers. In truth the process is maddeningly complicated and confused and can daunt many otherwise sophisticated New York literary agents. And while some agents have better movie and television track records than others, none has formulated a single and satisfying solution to the challenge of efficiently finding the right producer for movie or television adaptations of books.

For a discussion, click here.

A breaking news story in Publishers Weekly reports that Houghton Mifflin Harcourt announced a temporary suspension of acquisitions, fueling lots of speculation about the health of major publishing companies in the current toxic economic climate.

In its report, PW used the word “leveraged” in describing a possible underlying reason for HMH’s extraordinary action. A news report in WeeklyTelegraph.co.uk may shed some light on the underlying deal that that brought Harcourt into the arms of Houghton:

Publishing giant Reed Elsevier has sold the remaining parts of its Harcourt publishing division to Houghton Mifflin Riverdeep Group, the publishing and software group chaired by Irish entrepreneur Barry O’Callaghan, for $4bn (£1.96bn).

Mr O’Callaghan’s HM Riverdeep Group completed the deal to buy the US-based Harcourt schools education publishing business yesterday evening, after the stock market closed. It is paying $3.7bn in cash and the remainder in shares.

Investment banks Credit Suisse, Lehman Brothers and Citi advised on and financed the deal for HM Riverdeep, which is expected to complete in the first half of 2008.

The acquisition will make HM Riverdeep one of the largest US educational textbook publishers alongside McGraw-Hill and Pearson’s Simon & Schuster.

Mr O’Callaghan’s interest in the remainder of Reed’s educational business comes just months after his Dublin-based company completed a $5bn reverse takeover of Houghton Mifflin, the fourth largest textbook publisher in the US.

That deal was one of the biggest in Irish corporate history, exceeding the $3.9bn (£2.66bn) leveraged buyout of Jefferson Smurfit, the family-controlled paper and packaging company, by Madison Dearborn, the private equity company, in 2002.

Riverdeep originally floated on Nasdaq in 2000 with a value of $140m, but was then taken private in 2003 with a valuation of $400m.

Reed Elsevier bought the Harcourt Education division in July 2001 as part of its acquisition of Harcourt General. The Anglo-Dutch business information, medical and academic publisher put its education arm up for sale in February, after errors and contract losses in its exam-testing business damaged revenues and profits.

In April, Pearson, owner of the Financial Times, agreed a $950m bid for Reed’s assessment and international education assets, continuing a spate of big deals in the educational publishing sector.

Though other major trade publishers have troubles of their own right now, they are of a more conventional kind — possible slowdown of holiday sales, returns, and the like. Alarmed authors and agents can take comfort, however cold, that the HMH situation is not representative or predictive.

RC

David Carr enumerates some, but by no means all, of Google features, services and programs he uses and concludes that for all intents and purposes he lives in Googleplex, as the media octopus’s headquarters are nicknamed. Google, he confesses, “is my ever-present wingman.”

But because everything Google designs is so good, Carr obviously doesn’t feel like a victim. More like a kept man, as it were, which is why the title of his New York Times think-piece is, Google Seduces With Utility. “If Google owns me, it’s probably because I am in favor of what works.”

Among the instruments of his willing, happy captivity, he lists Gmail, the calendar, the map, voice and video chat, and YouTube. I’m sure he could have added dozens more but he ran out of space.

The secret of Google is, simply, its excellence. “The most powerful form of advertising is to be exceptional,” Carr quotes blogger Ranjit Mathoda. “Google has created an ecosystem that perpetuates itself by being useful.”

RC

The 27th volume of John Norman’s Gorean Saga is now available for purchase as a paperback. The e-book version has been available for several weeks.

Ellen is a beautiful young slave girl on the planet Gor. Yet she was not always thus. For nearly sixty years she was a woman of Earth, but life had largely passed her by. Then, following an apparently chance encounter at the opera with a strangely familiar young man, an echo from her past, she finds herself transported from Earth to Gor. Here she discovers the true identity of her kidnapper and his sinister motives.

Her fate is decided in this latest thrilling installment of John Norman’s best selling Gorean Saga.

Treat yourself to a holiday gift and fill in the gaps in your collection of Gor. For a complete list, click here.

Richard

“As we head toward a way of life organized around the diversity of screens — I’m looking over my laptop at the television, while my iPod charges on the desk until I take it with me to my next screening, where I’ll be sure to shut off my cellphone — there will be at least an equal diversity of art forms and ways of appreciating them, alone or in groups. And they will continue to cross-pollinate.”

That is the conclusion reached by A. O. Scott in his important essay, The Screening of America, in the November 23, 2008 special issue of the New York Times’s Sunday Magazine.

Scott foresees the death of cinema as we know it, but at the same time projects its transformation into new avatars fed by dazzling advances in high-definition and screen technology. “The digital age may well turn out to be a golden age of cinephilia,” Scott suggests, “with a wider variety of movies available for viewing in better conditions than ever.”

RC

The New York Times Sunday Magazine of November 23, 2008, called “The Screens Issue”, is dedicated to the ubiquity of screens in every aspect of our daily life. If you can get through a typical day without once viewing a screen – cell phone or Blackberry, TV or computer monitor, gas station pump display or automobile GPS, DVD or Kindle — then skip this important publication. It’s okay. You’re probably dead anyway.

In a fascinating profile by Virginia Heffernan, a benevolent hacker named Virgil Griffith describes his motives for developing WikiScanner. The tool
“makes it possible to figure out which organization made which edits to a Wikipedia entry by cross-referencing IP addresses with a database of IP address owners.”

“You can imagine how much fun this tool is to deploy,” writes Heffernan, ” — to see how someone with a senate.gov address tinkers with the Jeremiah Wright entry, or how Diebold apparently protects its reputation by deleting criticism of its voting machines and political connections. The promise of WikiScanner is to help free Wikipedia from both propaganda and sabotage.”

It also help Griffith get girls, according to the author of the Times article.

RC

The first thing I thought when I saw people lined up in front of the Verizon store around the corner from my office was, They’re hiring temps for Christmas sales jobs. Why else would people stand twenty deep in near-freezing temperature?

Then I remembered: today was release day for the Blackberry Storm, and Verizon is the designated exclusive retail sales outlet. (Okay, so the photo isn’t a Verizon store, but it got your attention.)

So, what’s to line up for? Well, the Storm comes with a touch screen like the iPhone’s but there the resemblance ends. The screen feels, “clickable,” says Jeff Rauschert, interactive media manager for the Flint Journal. Among the other things Rauschert likes are,

• Beautiful screen resolution
• Full-size headphone jack
• Addition of “To Go” software
• Speaker sound, clarity
• 3.2 megapixel camera with video
• Robust email and messaging
• Copy and paste out of the box

Al Sacco of CIO offers eight reasons to select the Storm over the iPhone:

•Stereo Bluetooth
•Removable battery
•Expandable memory
•Digital camera, video recording
•Storm works as a tethered modem
•Touch screen provides tactile feedback
•Cut-and-paste
•Multitasking champ

Is the Storm worth losing three fingers to frostbite? Read Sacco’s analysis and decide for yourself. And check out this video.

RC

As cash-hungry bookstores return slow-moving inventory to publishers to free up bucks to buy new books, and as the industry anxiously monitors the health of the Borders bookstore chain, there are signs that publishing is hunkering down like every other business enterprise these days.

Publishers Lunch Deluxe cites an Associated Press report that Random House is pulling in its horns on employee benefits. First, it’s freezing pensions at current levels; and second, new hires will not be offered pension participation. The company will continue to match employee contributions to 401k plans, however. Deluxe, publishing’s online trade newsletter, also mentions a Quill and Quire news item that Random’s Canadian division will not be exhibiting at the Canadian Book Expo.

Random House is a bellweather; whatever it does, the rest of the trade book business often follows.

However…

Before everyone starts running on fear itself, we should remind ourselves that books are still the most cost-effective, personal and meaningful holiday gift of all, and the pleasure of reading one can stretch over months.

I’ve never agreed with anything President Bush has said, but, my fellow Amuricans, maybe this is a good time for Americans to go shopping — for books. In fact, a wonderful initiative has been offered by a major publisher to promote books as gifts. It’s called Books=Gifts. Check it out. And when you do, notice who’s sponsoring it: Random House!

Richard Curtis