The consolidation of the major book publishers continues. News Corp., which owns The Wall Street Journal
, HarperCollins and Fox News, wants to buy
Simon and Schuster from CBS, according to the WSJ. If the deal goes through, there will be even fewer major publishers. The digital revolution and Amazon.com's move into the book publishing business are being cited by analysts as the driving forces behind all the mergers. In order to compete online on a global basis, publishers believe they have to consolidate to have the power to stay in the game.
According to the WSJ News Corp. is splitting its assets into two different companies. One company will hold the film studio 20th Century Fox and Fox News.
The other company will hold all the publishing assets, including HarperCollins, Dow Jones, and Simon and Schuster if the deal goes through.
Insiders say that the new company will have a lot of cash on hand and is ready to do more acquisitions once the merger goes through. If HarperCollins and Simon & Schuster do end up merging, the resulting entity will become the second largest book publisher in the U.S. The Penguin-Random House combination will own around 30% of the marker, while Simon and Schuster/HarperCollins will have up to 20% of the market. That is a lot of market share for just two book publishers.