| HBS Case Collection
(Revised April 2007)
On June 12, 2003, the proposed merger of Random House and Time Warner Book Group was called off by the CEO of Random House's parent company, Bertelsmann. The announcement was welcomed by several critics who had questioned the logic of further consolidation in the book publishing industry, citing the power of the major publishing houses--Random House was already the world's largest book publishing company--and the accompanying commercialization of literature. Peter Olson, CEO of Random House, had to decide how to proceed and confront several other challenges facing the publishing industry: most notably, backward integration by Barnes and Noble into book publishing and the potential for digital devices such as e-books to undermine the traditional value chain of book publishing. Describes each of these tensions.
Keywords: Mergers and Acquisitions;
Problems and Challenges;
Media and Broadcasting Industry;