Full regulatory approval over 12 months away and a backlash from authors worried about a less competitive book publishers‘ market may not be the only issues facing the merger deal between Bertelsmann, owner of the Random House book publishing unit, and Pearson’s Penguin Group. The Week reports that Rupert Murdoch’s Harpercollins book publishing outfit is looking to offer up to $1.6 bn for the acquisition of Penguin, which would effectively scupper the deal.

As has now been widely reported, about five months ago, a representative of Pearson PLC contacted Bertelsmann SE & Co. The result of that contact emerged Monday, when the two companies unveiled the creation of Penguin Random House, a combination they hope will be better able to deal with the digital transformation of the book industry.

The timing of the initial approach came at a pivotal moment in book publishing. A few weeks before, the U.S. Justice Department filed an antitrust suit against Apple Inc. and five major publishers, including Penguin, alleging an price-fixing conspiracy regarding e-books. While three of the publishers settled, two continue to fight the suit, including Penguin.

Random House wasn’t involved in the suit.

Books from publishers Penguin and Random House on a bookstore shelf in London on Friday. The two houses have announced a deal to merge.

The settlement forced publishers to allow a resumption of discounted pricing of e-books, which Amazon.com Inc. had championed after it introduced its Kindle e-reader in 2007 but which had been shut down by the publishers in 2010. The implication of a new round of discounting was immediately clear: It could eventually weaken Barnes & Noble Inc., the major competitive force against Amazon.

And book executives see that as bad news. While e-books are good for publishers’ profit margins, by removing the costs of printing and distribution, the worry was that a more powerful Amazon could eventually squeeze publishers on prices.

For book publishing, an industry dominated by a half-dozen big players, consolidation was one answer. Combining forces would allow publishers to gain more heft in negotiating terms with retailers, including Amazon, industry executives said. By moving first, Pearson hoped to gain an advantage, a person familiar with the situation said.

“In reviewing the long-term trends and considerable change affecting the consumer publishing industry, Pearson and Bertelsmann both concluded that the publishing and commercial success of Penguin and Random House can best be sustained and enhanced through a partnership with another major international publishing house,” the companies said in a joint statement.

The companies’ boards approved the plan Sunday, despite a last-minute expression of interest in buying Penguin that came from News Corp., parent of HarperCollins publishers. News Corp., which also owns The Wall Street Journal, never made a formal offer, a person familiar with the situation said.

The Pearson board considered all options, including a cash sale, but unanimously supported the joint-venture structure with Bertelsmann, the person said.

Selling Penguin would have triggered a big capital-gains tax liability, another person familiar with the situation said.The companies said they hoped to complete the merger in the second half of next year, pending regulatory approvals. The attitude of antitrust regulators in the U.S. and Europe is an open question.

Management of the new company will be split between the two publishers: Random House Chief Executive Markus Dohle, 44 years old, will be CEO while Penguin CEO John Makinson, 58, will be chairman.

The deal highlights how the rapid adoption of digital books is changing book publishing. The proportion of consumer-book revenue for publishers coming from e-books rose to 14.8% last year from 6.3% in 2010, according to BookStats. A publishing executive said that at his company, e-books could account for 30% to 50% of fiction sales now.

E-books should be good news for publishers. In addition to the lower production and distribution costs, unsold books don’t come floating back from retailers. Those returned book can reach 30% to 40% of a print run, even on best sellers, an executive said.

But as physical books decline as a proportion of total sales, the fixed costs of maintaining warehouses and printing facilities hurts overall margins. Some publishers already have started to address this. HarperCollins, for example, has closed two of its four warehouses in the U.S. The combined Penguin Random House will have between them four warehouses in the U.S., raising the possibility that some could be closed.

Mr. Dohle said the two companies were just starting to analyze the potential cost savings, including those in distribution, warehousing and information technology. But “this deal isn’t based on synergies; it is based on future growth,” he said.

Mr. Makinson said the merger will allow the companies to invest more heavily in social media and other new technologies. With fewer traditional bookstores around, he said, “it becomes harder and riskier to take a chance on new writers because you can’t be sure of finding an audience.” Social media can help remedy that.

Some book agents have voiced concerns about the impact of the merger. Mr. Makinson emphasized that authors won’t see significant changes because the two companies intend to keep the same number of publishing imprints.

Scott Turow, best-selling author and president of the Authors Guild, said: “Publishers are facing a new reality with some of the biggest companies in the world, including Google, Apple and Microsoft entering their field. I understand why they want to get bigger. But what I haven’t thought through yet is what the down side is for the cultural landscape.”

The deal was announced just a few weeks after Pearson’s longtime chief executive, Marjorie Scardino, disclosed plans to step down at year-end. Her departure sparked speculation about whether the incoming CEO, John Fallon, would focus the company on educational publishing, the area of the company he runs, exiting businesses such as consumer books.

Each company is committed to staying in the book venture for the first three years. After that, Pearson has options to raise cash from its stake, including by requesting a debt-financed dividend payment. Both companies can call for an initial public offering of the venture after five years.

Book publisher and Self Publishing Information provided by S&D book publishers and christian book publishers as a courtesy.

As Microsoft demonstrates from their development of publishing tool software, the role of the advertising executive in modern book publishing practice, has never been so ubiquitous and important. Executives of any book publishers organization should take every convenient opportunity of speaking in public, provided they are good performers. The reading of papers at conferences, speaking on radio or television, lecturing to rotary clubs or other societies are all opportunities to secure contacts which may prove useful. With an organization there is much to be gained by regular conferences and discussions at different levels.

This is particularly valuable in the case of an organization with branches spread throughout the country. Everyone has something to contribute to the common pool in the book publishing process. In conclusion, the media of communication are not the most important part of public relations activity but they occupy a vital area in any forward-thinking organization since they provide the link between an organization and the different groups and spheres of interest. There are signs of radical changes in methods of communication with the rapid growth of the use of computers, the automation of office techniques, satellite communication, etc, but it is difficult to forecast how soon these tendencies will make a real difference to our present means of communication.

The public relations adviser today, whether as a staff member of the organization or as outside counsel on public relations to management, has a new top function to fulfill. In this rapidly changing world, the obligations of company management are no longer limited to increasing sales and profits by winning friends and influencing people, it must serve the society of which it is a part in many different ways, in order to survive. The business organization, today has new responsibilities imposed on it by the society. It must fulfill its obligations as a good citizen of the community in which it functions. It must have socially sound living and training practices. This is key to effective book marketing from book distribution. It must be aware of and help to maintain the environment where it functions. It must help to improve the social conditions of the public on which it depends. It must participate in all efforts to improve the broad society. Successfully to fulfill the new demands, pose the challenges of the eighties to Public Relations

Contact with the Press may be either on personal basis, by written communication, or at a press conference. Personal contact is undoubtedly the most effective way of promoting close understanding with members of the Press, but with such a large area of interest it is obviously not possible to have personal contact with the Press all the time. Press releases are therefore an important part of press relations, and the releases which are merely written news items may be sent out to a very wide, or, on occasion, to a restricted list of journalists and publications; particularly of note in the poetry book publishers arena.

Some companies will wish to have a constant contact with the various sections of the Press and will issue two or three stories a week as well as extra news items for particular journals. This level of activity may be appropriate for some large companies but many companies will not need to be quite so active in keeping in touch with the Press. It is very desirable that in every organization there should be a press officer whose primary function is to help forge a durable link between the company and the Press, and a separate department for U.S. Copyright Registration.

In a small company the press officer may also be the public relations officer; in a large organization, he may be the head of a sizable press office. Either way, he must seek to understand the needs of the different sections of the Press and be prepared to make a sustained effort to help the Press in its work. It is only in this way that he can serve his own company to the best possible advantage. A press conference should be held when there is an announcement of some importance to be made when questions are likely to be helpful to members of the Press in writing their stories. It may also be justified when there is something to show like a model of a new hotel complex or a plan of a new motorway. A press conference may also be very useful for giving background information “off the record” about some new development of significance. The Press will respect the request for keeping some of the news “off the record” provided it is made clear which part of the conference is in confidence.

Book publisher and Self Publishing Information provided by S&D book publishers and christian book publishers as a courtesy.

After a lengthy and complex litigation process, today both Google and the following book publisher plaintiffs (The McGraw-Hill Companies, Inc.; Pearson Education, Inc. and Penguin Group (USA) Inc., both part of Pearson; John Wiley & Sons, Inc.; and Simon & Schuster, Inc. part of CBS Corporation) announce that a legal settlement agreement has been reached with Google. Both parties claim publicly to be pleased with the outcome.

This agreement establishes a framework to provide access to book publishers’ in-copyright books and journals that were digitized by Google for its Library Project and to govern how such works may be scanned in the future.

The agreement settles the copyright infringement lawsuit filed by five publisher plaintiffs. As is typical of a private settlement between parties, a number of terms are confidential. You can read Google’s press release regarding the settlement however we provide more details below for publishers analysis. The key elements of the agreement:

The agreement settles the copyright infringement lawsuit filed by five publisher plaintiffs.  As is typical of a private settlement between parties, a number of terms are confidential.

The key elements of the book publishing agreement:

1. First and foremost, the settlement acknowledges the rights and interests of copyright-holders.  A publisher can choose to make available or remove its works from Google’s programs.
2. The agreement covers US book publishers – those who are members of Association of American Publishers and certain other publishing associations with US publisher members – for in-copyright books and journals in which they hold a copyright interest under US law.
3. The agreement provides for such book publishers to make available or remove scans of their works previously created in the Google Library Project.
4. The agreement provides a set of satisfactory terms as to how future scanning by Google of covered books and journals may be addressed by their publishers.
5. The agreement authorizes Google, through separate agreements with individual publishers, to make commercial use of those scans – particularly in educational math books.
6. The agreement also authorizes Google to enter into file return agreements with publishers.  This gives publishers digital files of their scans for certain authorized uses while also granting Google additional rights.
7. This deal marks the end of seven years of litigation between the publishers and Google relating to the Google Books Library Project.  It secures dismissal of the lawsuit, without prejudice or release of claims, by stipulation of the parties.
8. This settlement does not affect Google’s litigation with the Authors Guild nor does it address the underlying questions in that suit.
9. This differs from the class action settlement rejected by the court in 2011.  It is narrower in scope and effect because it resolves more limited claims by individual plaintiffs rather than a class.
10. There are a number of reasons why the parties chose to make the deal.

For the publishers, they wanted to find a way to move forward and bring this lengthy, complex litigation to an end while building on the existing relationship between publishers and Google.

Publishers’ attempts to settle this through the court were not successful and a private settlement, which does not require the court’s approval, was the most effective means.  Although the settlement does not resolve the disagreements regarding the scope of fair use and other points of copyright law, it resolves to the plaintiffs’ satisfaction the practical issues underlying the dispute which led to the lawsuit.

Google sought to make the deal to bring to an end seven years’ litigation and move ahead with increasing the body of works available in Google Books and Google Play.  This deal proved to be mutually beneficial because it expands eBook discovery and sales while respecting the rights of copyright owners.

Book publisher and Self Publishing Information provided by S&D book publishers and christian book publishers as a courtesy.