Speculation about the fate of Gemstar's e-book operations intensified last week when new company chairman Jeff Shell told Reuters that he would consider selling the division for the right price. Shell said a sale would be complicated by the difficulty in valuing the e-book assets. It is also unclear who might be interested in acquiring the e-book unit. The future of e-books within Gemstar was placed into question when Henry Yuen resigned from the company last month (News, Oct. 14). Yuen acquired e-book publishers NuvoMedia and Softbook in early 2000 as part of a plan to disseminate a wide range of information through dedicated devices, a plan that largely failed to materialize, as customers balked at the cost of the devices and publishers were worried about the proprietary approach.
If Gemstar were to abandon e-books, however, the effect on the industry is likely to be mild. One publisher savvy about e-publishing said that a shakeup would cause some loss of revenue, but added, "It would be hard to cry over the [failure of the] business model." The publisher noted the possibility that Gemstar could shut down the entire e-book operation in the interest of cost-cutting and appeasing investors, but wondered if that might backfire: "You end up raising questions about what the division is doing there in the first place."
