By Dennis Abrams
Last week, News Corp, the owner of HarperCollins Publishers (as well as the Wall Street Journal), expressed interest in buying Simon & Schuster from its owner, CBS Corp.
This comes on the heels of New Corp’s last minute and ultimately unsuccessful bid for Penguin, attempted just before its announced merger with Random House. According to The Wall Street Journal, “The people described the talks as preliminary and cautioned that a deal isn’t imminent.”
Says the Journal, “For book publishing, an industry dominated by a half-dozen big players, consolidation is seen in part as a way to weather the transition to digital media. Combining forces can allow publishers to gain more heft in negotiating terms with retailers, including Amazon.com Inc.”
News Corp is in the process of splitting into two listed companies, one containing entertainment assets, the other containing publishing assets including the Journal and HarperCollins. The new publishing company, according to the Journal, is expected to have a significant amount of cash on hand, with the potential to be used for further acquisitions, including newspapers and additional investment in its growing educat9ion business.