Random House Purchases Minority Stake in Xlibris

Information Today, May, 2000

Random House Ventures, a newly formed investment subsidiary of Random House, Inc. (the trade book publisher), and Xlibris, an online provider of direct publishing access for authors, have announced that Random House Ventures has acquired a significant minority position in Xlibris. Through Xlibris' digital service, writers can go from their finished book-length manuscripts to published hardcovers, trade paperbacks, and e-books within several weeks, according to the announcement.

The strategic partnership between the two companies was announced by John Feldcamp, CEO of Xlibris, and Richard Sarnoff, president of Random House Ventures. While two Random House Ventures executives will join Xlibris' board, Random House Ventures will have no direct involvement in the management or operation of Xlibris, which remains an autonomous company based in Philadelphia. Further terms were not disclosed, though The Associated Press reported that the transaction was worth at least seven figures.

Xlibris also announced that its basic publishing service will be free to all writers. (Authors were previously charged a fee of $450.) By using this service, authors control their publications through a proprietary online process, and retain all rights to their own work. Xlibris manages book design and publication. Its digital archives file and store the contents, which are printed on demand in single, or short-run quantities and are made available through traditional and online retail and distribution channels, as well as through Xlibris' Web site. The objective of the company, which tracks sales and remits receipts on every copy sold, is that every one of its authors' books always be in print and available.

Sarnoff said: "With the ease and skill by which they make it possible for any writer to publish their work, Xlibris is poised to become an appealing choice for many prospective authors. We admire John Feldcamp and his team for having created a wonderful interactive service organization that is totally focused on the needs of the writing community. This financial and strategic alliance will provide emerging benefits for writers and readers as the Internet becomes more and more pervasive."

Feldcamp said: "We and our new strategic partner both strongly believe that every writer's work deserves an opportunity to reach its readership. Random House Ventures' investment and strategic commitment to Xlibris will help to make it possible to serve many more authors much more effectively, and to become the leading provider of publishing and other services for authors. It is becoming increasingly obvious that the Internet has vast potential to improve people's lives, and now Xlibris is using the Web to improve the circumstances of authors in ways that were never before possible."

In addition to the publishing services it provides, Xlibris has just launched a new online community for authors. The Xlibris authors' community will provide writers with member home pages, as well as the ability to interact with each other via chat rooms, forums, message boards, and writers' workshops. The site will also provide access to many additional author-oriented resources, including news, educational information, and reference tools. Xlibris, founded 3 years ago, has reportedly published about 600 books so far.

Random House, Inc. is a unit of the book division of Bertelsmann AG, a leading international media company with consolidated revenues of approximately $16.4 billion. With more than 600 individual companies, Bertelsmann has significant interests in all areas of media, including book, magazine, and newspaper publishing; music; television; multimedia; film; and radio.

[Editor's Note: On page 44 of our December 1999 issue, we reported that Barnes & Noble had purchased a 49-percent stake in iUniverse, another on-demand publisher.]

Source: Random House Ventures, LLC, New York, 212/782-9000; Fax: 212/302- 7985; http://www.randomhouse.com and Xlibris, Philadelphia, 888/795-4274, 215/ 923-4686; http://www.xlibris.com.