In one of the most stunning moves since Bertelsmann acquired Random House nearly five years ago, the Random House Trade Group is being combined with Ballantine Books to form the Random House Ballantine Publishing Group. The new organization will be headed by Gina Centrello, president and publisher of Ballantine, who has been appointed to the same roles at the new unit. Ann Godoff, president, publisher and editor-in-chief of Random Trade, is leaving the company.

In a memo to employees, Random House chairman Peter Olson explained the changes by noting that "despite the many core strengths of the Random House Trade Group, they have been the only Random House, Inc. publishing division to consistently fall short of their profit targets." To ensure its publishing continuity, "it has become imperative to improve the Random House Trade Group's financial success," Olson wrote. According to sources at Random, Olson's actions were driven in part by the growing frustrations at other divisions within the company that Random Trade was not pulling it financial weight.

Olson praised Centrello as a superb publishing manager with "eclectic publishing tastes." After revamping the publishing program at Pocket Books, Centrello moved to Ballantine in 1999 where Olson credited her with transforming Ballantine into a "robust and profitable publishing division."

Under the combined unit, the Random House Trade Group and Ballantine Books editorial operations will maintain separate identities, although the two lists will continue to sold separately. Nancy Miller will remain as head of Ballantine's editorial operations, and Centrello told PW her top priority is to find an editor-in-chief to direct Random Trade's editorial operations. Centrello said she was "honored" by her new assignment. "This is a great opportunity to build on the literary traditions at Random House. I've long admired their list and know that as the combined Random House Ballantine group we can reach greater levels of success."

The questions as to what changes Centrello will bring to the new division was the all the buzz among industry members both inside and outside of Random last week, many of whom were concerned that Random's literary focus would be watered down. Centrello said before making any moves she "needs to get to know everyone. Random has a wonderful editorial team that I will rely on." Centrello said she suspects that she'll cut titles from some areas and add titles in others, but said until she gets to know the Random operation better, it is premature to discuss specific changes. She said the one thing that she is certain of is that the new division "will give us the option to buy a broad array of books in the Random House tradition."

Godoff has been involved with Random since 1991 and has been responsible for such successes as Midnight in the Garden of Good and Evil, The Alienst, The God of Small Things and White Teeth. Olson praised Godoff for her "tremendous" accomplishments at Random, and stressed that "the change is intended to build on the editorial excellence of Random House, and not about trying to dismantle it." The company is committed to maintaining Random's heritage of quality, but "financial success must be part of the equation," he said.

The creation of the Random House Ballantine Trade Publishing Group in some ways moves the company back to its roots; Random bought Ballantine and integrated it into its own company years before the company became the megalith it is today.