Houghton Mifflin close to $5bn sale to Riverdeep

The FT is reporting that Houghton Mifflin is close to agree a sale to Riverdeep. Extract from the FT.com alert:

Houghton Mifflin is close to announcing a deal to be sold to Ireland’s Riverdeep in a deal worth nearly $5bn that will offer a lucrative exit to the private equity backers of the US publishing group.

According to people familiar with the matter, Bain Capital, Thomas H Lee Partners and Blackstone are expected to make about 3.5 times their money from the deal after three years of ownership.

The transaction is structured as a reverse takeover, with Riverdeep, a Dublin-based company, creating a new company to acquire Houghton Mifflin, based in Boston, for a cash consideration of $3.3bn.

The new company will also acquire Riverdeep, which itself was taken private in 2003, using paper at $6 a share. The current proposed deal is being financed by $1.7bn of senior bank debt, $1bn of high-yield debt, $350m of mezzanine debt and $350m of preferred equity. In addition, there is $600m of new equity – $200m of which Barry O’Callaghan, Riverdeep chief executive, is raising through a bank facility pledged to his share in the new business.

… The new company will be based in Ireland to take advantage of 12.5 per cent corporate tax rates and the favourable treatment of royalties earned on Ireland-registered intellectual property sold to subsidiaries in the US and elsewhere. The company estimates this will save about $200m over a five-year period.

Earlier coverage of this includes:

The Book Standard: Reverse Takeover of Houghton Mifflin by Riverdeep
Boston Globe: Deal reported close for Houghton Mifflin

Google News coverage: here

Technorati Tags: Houghton Mifflin, Riverdeep

Richard Poynder: Beyond Selfish Interests

One of the better articles on Open Access, Open Access: Beyond Selfish Interests, has just appeared on Richard Poynder’s blog, Open and Shut? It’s a long piece – over 12,500 words – but thoughful and insightful, and goes well beyond the usual rhetoric.

I’m not the first to commend it; Peter Suber and Stevan Harnad have both praised it highly: Peter said

“if I were convening a meeting on long-term strategy, I’d assign this article in its entirety as background reading. I encourage you to read it for the same reason”,

while Stevan said

“… he characteristically takes the OA debate and developments several layers deeper than the one at which most of the usual suspects customarily think and reason. … But I won’t do a critique, because his essay is just too good to harry with niggles. Read it and make up your own mind.”

Over on The Parachute, though, Jan Velterop concedes that while it is well-written (too well written, in fact, since because of this “one may not easily spot that some of his observations are presented as foregone conclusions, yet are not supported or warranted”) but takes issue with a couple of points.

Technorati Tags: Open Access

The Digital Mathematics Library

This is not news but for some reason the enormous Digital Mathematics Library had not made much of an impression on me before today when I stumbled across it. The DML site now offers links to 211 digitized journals/seminars (> 4,017,902 pages) and to 2170 digitized books (> 484,904 pages). Much if not most of the content is open access (the exceptions are mainly links to journals held on JSTOR). The coverage is certainly historical, with for instance articles from a 1691 journal just a couple of clicks away on the French Gallica archive.

The DML project is described in a September 2003 article (that’s how behind the times I am on this!) by Allyn Jackson in Notices of the American Mathematical Society. DML is a retrodigitisation project; from Jackson’s article:

The grand vision of the DML is to have all of the mathematical literature online and available through a central source to anyone who has a computer and an Internet connection. … The initial goal of the DML is the retrodigitization of all of the past mathem atics literature. … the grand vision of the DML is feasible: with today’s technology, it is actually a tractable task to put all 50 million pages of the past mathematical literature online.

The older literature is particularly important in mathematics:

Unlike researchers in many other disciplines, especially in the sciences and engineering, mathematicians rely heavily on past literature while working at the frontiers of research. Having that literature available electronically would have a large impact on current research in mathematics.

The DML project is actually a fairly loose federation of separate digitisation projects, including Numdam (a French project supported by CNRS providing delayed open access to digitised maths journals), Göttinger Digitalisierungs Zentrum (the Deutsche Forschungsgemeinschaft programme for retrospective digitisation of library materials), and Emani (an archiving & preservation project ).

Technorati Tags: Open Access

Wiley buys Blackwell Publishing

From the FT.com news alert (Friday Nov 17 2006):

US group buys Blackwell Publishing
By Pan Kwan Yuk and Mark Odell
John Wiley & Sons, the US-listed publishing house, on Friday agreed to buy Blackwell Publishing, the Oxford-based academic publisher, for £572m in cash and debt.

The deal may put an end to the long-running feud between the 10 Blackwell family members who control one of Britain’s biggest and best-known privately-held businesses.

Blackwell, which traces its history back to a 12-square foot bookshop opened in 1879 in Oxford, has two businesses: publishing and retailing. The retailing unit is not included in Friday’s deal.

The publishing business is the profit-driver of the group. The most recent figures available show that profits rose to just over £21m in 2004, from £13m a year earlier. The bookshops fell into a loss of almost £7m for the same year, against a profit of £900,000 in 2003.

In 2002, Toby Blackwell, the then 73-year-old former chairman, tried to force a sale after rival publisher Taylor & Francis tabled a £300m bid. But his nephew Nigel, the company’s current chairman, opposed the plan. Toby eventually lost the fight and the firm stayed in family hands.

Commenting on the Wiley deal, Nigel Blackwell said: “Wiley and Blackwell are two great firms sharing the same cultural values, and in particular, a common publishing ethic. Marrying them together makes perfect sense both commercially and for the benefit of the global academic and professional community.”

Wiley, which publishes scientific, technical and medical journals, encyclopaedias and online products, said it had already received irrevocable commitments from the principal Blackwell shareholders.

The transaction is expected to be completed by early 2007.

JP Morgan Cazenove advised Blackwell.

Technorati Tags: Blackwell, Wiley

Beware of bananas

A story from data-recovery experts Ontrack UK’s list of Top 10 data disasters: Ontrack UK – Top 10 List of Data Loss Disasters of 2006:

Beware of Bananas – A customer left an old banana on the top of his external hard drive which proceeded to seep its contents into the drive, ruining the circuitry. The drive would no longer run, but Ontrack was able to clean the drive and repair the circuit board so the drive would spin long enough to recover his data. The banana, however, could not be recovered.

No. 7 on their list was rescuing the data at “a leading UK research university” after a major fire – presumably the fire in Southampton’s data centre in October 2005 (but if so, it’s not clear why this makes the Top 10 for 2006?). Southampton’s Eprints repostitory service was offline for a few days following the fire, a gap in service which was not really up to best practice for disaster recover for online services. (Commercial services like ScienceDirect have full mirrored back-ups that can switch in almost immediately in the event of catastrophic disaster.)

Technorati Tags: Disaster recovery

Elsevier update

Elsevier posted a trading update today. Key points:

• The Elsevier, LexisNexis and Reed Business divisions are performing strongly in generally favourable market conditions. These businesses, which account for over 85% of Reed Elsevier’s adjusted operating profits, are continuing to show encouraging revenue momentum and good underlying margin improvement.
• Harcourt Education division has however been impacted by underperformance in the Assessment business and a weak textbook market.
• Elsevier is performing well in both the Science and Health markets. Subscription renewals have been strong, the second half book publishing programme is going well, and there is continued good growth in online product sales. Underlying operating margins are improving with good revenue growth and further cost efficiency.

The market marked Elsevier’s share price down ~4% in response to the Harcourt news:

“Shares in Reed Elsevier, the publishing group, fell on Thursday after it warned that revenues would be ”broadly flat“ at its US-based Harcourt Education subsidiary. The Anglo-Dutch company said in a trading statement that Harcourt had been hit by weaker textbook markets and an underperformance in its assessment division, which tests schoolchildren. Not only had there been cost overruns on some contracts but there had generally been fewer contracts to win. In addition, the business has had to pay penalties for some mistakes in its testing contracts. Margins at Harcourt are now likely to fall to 14 per cent from 18 per cent in 2005.” [FT.com]

Billionth ScienceDirect article downloaded yesterday

“In its first year, just over 300,000 full text articles were requested from the site by about 60 customer organisations. Now, in 2006 a record usage of more than 300 million articles has been achieved, downloaded by nearly 11 million users in 134 countries. The one billionth article download has also been counted by industry-standard measurements as Elsevier is fully COUNTER compliant”

Elsevier to expand eBooks programme
IWR reported a couple of days ago that

“Elsevier plans to launch 4,000 scientific and technical books online next year, a major expansion to the resources already available on STM database ScienceDirect .

”The expanded programme will include ebook titles published since 1995, with approximately 50 titles added to the ebooks list on ScienceDirect each month. Currently over 2,000 journals published by Elsevier are available.“

On the subject of ebooks, I blogged a note about Springer’s expanding ebook programme last week. Springer currently has 13,000 ebooks in its collection, far more than Elsevier.

Technorati Tags: Elsevier, eBooks

Stanford colloquium on academic journal pricing

Stanford held a colloquium to discuss journal pricing on 6 November. It was covered in the Stanford Report by Barbara Palmer under the headline Ongoing crisis in academic-journal pricing is the focus of recent colloquium. An extract:

Although there was little clear consensus about strategy among presenters, faculty and staff at a Nov. 6 colloquium on issues in scholarly publishing, there were two points on which almost everyone agreed: The high costs for journal subscriptions charged by commercial publishers in recent years are unsustainable, and the ability to distribute articles electronically has fundamentally changed academic research and publishing.

The colloquium, sponsored by Stanford University Libraries, invited presenters from Stanford and other institutions to discuss issues including ways in which institutions and scholars are responding to the ongoing crisis in journal pricing. From 1986 to 2003, the unit cost of serials purchased by academic research libraries rose by 215 percent compared with a 68 percent rise in the consumer price index over the same time period, said Doug Brutlag, professor of biochemistry and current chairman of the Academic Council’s Committee on Libraries. The Faculty Senate passed a resolution in 2004 encouraging faculty to consider journal pricing as well as reputation when considering where to publish or serving on editorial boards.

There is a big discrepancy between the prices charged by for-profit and nonprofit journals, reported Ted Bergstrom, professor of economics at the University of California-Santa Barbara, in a talk titled “The Changing Economics of Scholarly Journals.” Bergstrom presented data comparing journal costs in 2004 that showed that the price-per-page of for-profit journals was about three times the average price-per-page of nonprofit journals.

I think it is a shame that these discussions don’t reflect the reality that (for the larger publishers (i.e. those most criticised) the headline journal subscription price per title is no longer the only, or perhaps not even the most important, measure of the price of a journal. The widespread adoption of electronic licensing of bundles of journals has reduced the average price per subscription substantially. It is sometimes argued (e.g. in Grace Baysinger’s slides at this meeting) that journal bundling means the library buys journals it doesn’t need. But there is lots of evidence on substantial increased use of journals under “Big Deal” and similar licences, with substantial use coming from previously non-subscribed titles (and also from surprisingly old digitised journal archives, but that is another story), and substantial reductions in the average cost of accessing an article. For example, LISU (Loughborough University’s Library and Information Statistics Unit) note in their 2005 annual report that such deals were partly responsible for lowering the average cost per title of current UK serial subscriptions by 23% over the 5-year period to 2003/04.

This isn’t to say that there aren’t budgetary problems for libraries, or to deny the benefits of open access, but it would be better to conduct the debate with more rounded data.

Internet advertising continues to grow

The Interactive Advertising Bureau and PricewaterhouseCoopers announced that Internet advertising revenues in the US reached an estimated new record of $4.2 billion for the third quarter of 2006. From the press release:

“Interactive advertising, with its eighth consecutive quarter of growth and the largest single quarter ever, is on pace for its biggest year. This growth follows the trend of where consumers are spending their media time and the unique ability of Interactive advertising to effectively target and monitor ad campaigns,” said David Silverman, Partner, Assurance, PricewaterhouseCoopers.

The UK market is smaller, of course, but is also growing strongly. The IABUK reported at the beginning of October that online advertising sales for the first half of 2006 approached £1bn, at £971m. The 40.3% year-on-year growth meant that online ads in the UK now represent 10,5% of the advertising market, and is considerably larger than the radio, outdoor and consumer magazines sectors, and is approaching the share taken by national newspapers (11.4%). In fact, while online ads showed strong growth, TV, press, radio and direct mail all declined in the same period. IABUK anticipated that online would overtake national newspapers by the end of 2006.

I was pleased to see that spending on interruptive formats, including pop-ups, is declining and now represents 0.7% of all online ads. Somehow the annoyance factor remains substantially higher than 0.7% – possibly because some substantial users of pop-ups don’t report statistics to the IAB?

.

Technorati Tags: Online advertising

More on Self-archiving and Journal Subscriptions: Co-existence or Competition?

A couple of days ago I blogged on a new survey by Chris Beckett and Simon Inger of Scholarly Information Strategies looking at whether or not self-archiving of authors’ journal articles on open archives would be likely to lead to cancellation of journal subscriptions by libraries.

I had also conducted a survey of librarians’ opinion on the same topic earlier this year which received responses from 340 librarians (report available on the ALPSP website here; free summary article here). Although my methodology was much less sophisticated than this study’s (and there was some criticism on one of the lists that some of my questionnaire begged a key question), there are nevertheless some puzzling differences between the findings in the two surveys:

(1) Librarians in this new survey expressed no preference for the publisher’s final version over the author’s refereed post-print. I have no particular argument with the librarians on this but they appear to say something different in my survey. When we asked “What freely available versions would you consider an acceptable substitute for the journal?”, 97% chose the final journal pdf but only 39% the author’s post-print. The recent finding does seem anomalous, though: as the authors say, it is not concurrent with current observed behaviour. If it is a true finding, then it’s a concern for those who think there is value in the copy-editing, linking, formatting etc. that publishers do.

(2) This survey finds that a 6 month embargo had little impact (on librarians’ preference for (delayed) OA material rather than the paid-for version), but that longer periods (12/24 months) had larger effects. Overall, the direction of the preference for more immediate material is hardly surprising, but the key point for many publishers is where the tipping point lies, and on this there appears to be a conflict with our earlier findings. The very different methodologies makes it hard to compare reliably, but my data showed only 18% of librarians regarded material embargoed for 4 or more months an acceptable substitute for a subscription.

[more]

More on the Second Life InfoIsland Library

I blogged a note the other day about the development of libraries and library services on Second Life, the online virtual environment. Information Today’s blog had a piece from the Internet Librarian 2006 conference about the InfoIsland Library:

InfoIsland Library, the new library service that’s been built within the virtual-reality world of Second Life. Lori Bell said it’s been a globally collaborative project. Second Life is not really a game, she explained; it’s a virtual world. Reuters just joined SL with a news bureau. IBM is putting up a business there. Wired magazine just opened an office. It’s important for libraries to be there, said Bell. She said the virtual library site receives some 4,000 to 5,000 visitors per day.

She admitted that Second Life has an interesting dimension. “Pornography and gambling have tended to lead the innovative efforts.” More avatars are becoming tired of the sex and gambling so they’re pursuing info-related activities. It’s increasingly being used in higher education, especially for distance learning activities. “Besides building a virtual library, we’re still about books and reading.”

Partnerships are important to the effort. Lori detailed a number with groups like Tech Soup, ICT Library, World Bridges, and more. “Why reinvent the wheel,” she said. “It’s important to be collaborative in our efforts.”