Markus Dohle, Chief Executive of Random House, must have had a long hard think about what a booklover could possibly treasure more than a Kindle.
The answer is, of course, a Penguin. Everyone loves Penguin. Their paperback covers have become such a design cult that people flock to buy not just their books, but also bags, mugs, postcards, and even deckchairs, trussed up in Penguin livery. If Random House wants to stand up to the mighty Amazon, then this strong brand is a boost to their arsenal.
Why else would Random House want to merge with Penguin? Last year Random House reported revenues of 1.7 billion euros, with an operating profit of 185 million euros. This year, they published Fifty Shades of Grey – a phenomenal money-spinner. Surely there is no need to supplement strong organic growth with a merger, which adds value to the company but translates as job losses in areas such as warehousing, distribution, finance and production.
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