Bloomsbury looks for new media to replace Potter
Wednesday, 4 April 2007
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Bloomsbury, the publisher ravaged by a profit warning last December, yesterday revealed it is seeking to fill the void left by Harry Potter by creating the MySpace of the books world.
The company, which saw its profits crash 75 per cent last year, will publish its seventh and final new Harry Potter title on 21 July, leaving it with a giant hole to fill. It intends to step up the pace - and size - of its acquisitions and is looking for companies that will take it into new media markets.
Nigel Newton, the chairman and chief executive, said he was looking for deals in its core markets of the UK, Germany and the US. "We are now actively seeking larger acquisitions and looking at companies that not only complement existing activities but broaden our media involvement," he said.
He said the company was seeking funding from a third party to help it launch a literary alternative to the likes of online communities such as YouTube and Bebo.
While they have grabbed the digital headlines in the music and video online community space, Mr Newton said "no one has yet done the same for books, especially in a way which will benefit all the main players in the book business".
Bloomsbury, which has net cash of £24m, has made a small initial investment for a controlling stake in a start-up that is being developed by a San Francisco-based team. He expects to launch the site later this year or in early 2008.
The publisher, a former stockmarket darling, reported pre-tax profits of £5.2m down from £20.1m the previous year. The fall reflected the lack of a new Harry Potter title last year, weak trading ahead of Christmas and its failure to clinch key rights deal for some of its reference titles. Its shares fell 6.25p to 185.25p. The amount it invested in new authors last year jumped by 37 per cent to around £31m.
