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Random Buys Share of E-Publisher Xlibris
Steven M. Zeitchik -- 4/10/00
Transaction "bridges the distinction between traditional book publishing and the Internet-driven world"
Random House became the first publisher in its class to own a large chunk of an electronic publisher last week, when it took a 49% stake in on-demand and e-publisher Xlibris for an undisclosed price. The deal came via Random House Ventures, the company's new subsidiary specializing in electronic initiatives. Xlibris will maintain managerial control of its company.
Xlibris, based in Philadelphia, has about 600 self-published and out-of-print titles, with 400 waiting in the pipeline. It emphasizes on-demand printing, but says it will adjust to different formats as the market demands.
Both parties stated firmly that the deal would not open a gateway for Random to obtain and publish Xlibris content, nor will Xlibris serve as an electronic arm for the traditional publisher. Xlibris CEO John Feldcamp said, "They can help us from the depth of their knowledge, but we need to think about different perspectives. It's different to think about marketing hundreds of books and tens of thousands of books," which Xlibris hopes to soon have. In addition to capital, Feldcamp emphasized "technical and operational synergies" as motives for the deal.
Still, Random is now in a better position to benefit from the e-publishing revolution. "As to the idea of it being a farm team--I would say that's not a driver [of this deal]," said Richard Sarnoff, president of Random Ventures. But, he added, "I believe we will find a lot of authors, as we have in the past, through self-publishing channels."
Hoping to attract more authors, the e-publisher eliminated all costs to the authors to publish their works, and posted the Random logo on its home page. It has also formed an author community that will host author pages and provide bulletin board and other community services.
Random's stake in Xlibris is similar to the large slice Barnes & Noble took of on-demand house iUniverse last fall. It is, however, unique for a publisher of Random's stature, and stands in contrast to the strategy of Simon & Schuster, which recently squared off with electronic publisher Fatbrain over Stephen King's e-book project (News, Mar. 20)
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