The proposed takeover of Prentice-Hall Inc. by Gulf & Western Industries Inc., owner of the Simon & Schuster publishing house, continues a longtime trend of the publishing business: Some of the industry's best-sellers are the publishers themselves.
Recent months have seen the sale of Times Books to Random House, the movement of Harper & Row Publishers Inc.'s schoolbook division to MacMillan Inc. and the proposed leveraged buyout of SFN Cos., another big textbook publisher. The book industry, it would seem, has just about written the book on mergers and acquisitions.
"This is no different than what has happened in the book industry from Day One," Ben Compaine, editor of "Who Owns the Media," said of the possible Prentice-Hall sale. "Harper & Row came about from the merger of Harper and Row."
"This business has historically grown, like other media businesses, through acquisitions as well as start-ups," said J. Kendrick Noble Jr., Paine Webber publishing analyst.
In spite of all the buying and selling, however, the experts say the book business is not much more consolidated now than it was a few decades ago. For every merger that creates a publishing giant, they say, several new book companies spring up, further dividing the market.
"The book-publishing industry is a very diverse industry," said Compaine of Harvard University's Information Resources Policy Study Group. "It's a less concentrated industry than it was 40 years ago."
The current merger boomlet seems to be driven by a couple of factors, analysts say. For one, many publishing houses are still largely owned by their founding families, and estate-tax problems, family dissension and other factors can lead to the sale of family holdings.
In addition, corporate ownership and consolidation of assets can improve management and production efficiencies for many publishers, which often operate a bit informally. "Book publishing has largely been a mom-and-pop business and not always run by the most acute business people," Compaine said.
One of the main allures of book publishers these days is the potentially lucrative business of publication of computer software. Many publishers are diversifying into software, and other publishers who want to better their position in this fast-growing field see these companies as possible takeover targets. Prentice-Hall, for instance, is considered one of the industry leaders in the software-publishing business, offering sophisticated programs for professional training and education.
Ironically, a desire to participate in the computer-driven technological revolution was behind the last surge in publishing-industry takeover 20 years ago. At that time, many computer makers, including International Business Machines Corp. and Xerox Corp., bought textbook publishers, hoping to cash in on the interface between computers and education -- a market that is only now beginning to develop fully.