Tuesday, December 28, 2004

Pearson Profits Punkish at FT, Targets Textbook Tonic, but Issues Run Deeper

The Wall Street Journal offers up an interesting profile of Pearson PLC and its CEO Marjorie Scardino's efforts to focus the sprawling publishing empire "like a laser" on its core education, financial news and book publishing units. Hmm, never knew a laser could focus in three unrelated directions. While Pearson may not face some of the dilemmas that conglomerates such as McGraw-Hill must address (time for that Standard & Poor's spinoff?), the truth is that large publishing empires built up largely in a pre-Web era are faced with a galaxy of issues trying to scale their operations efficiently for divergent content markets that no longer operate like a string of contented cows. Education markets are very lucrative but require packaging and marketing efforts that offer less and less operational synergy with trade book publishing and financial news, two sectors in which profits are increasingly elusive and perhaps headed for permanent downtrends without radical intervention.

Large holding companies for publishing serve many purposes, but it's not clear that the repurposeable general management "know-how" that once allowed executive talent to flow from division to division and make an impact increasingly requires a new set of management techniques to define success in today's content markets. Those managemet tools are both more general in terms of dealing with a flattening of the general marketplace for content and an increasingly user-focused application of that content in specific market sectors. There will doubtless be a place for large corporations in publishing for many years to come, but unless they focus more on developing management talent that can reapply lessons of how to succeed with vContent in multiple market settings they're not likely to be the large holding companies that we know today for very long.
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