Random House, Inc.

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Random House, Inc.

201 East 50th Street
New York, New York 10022
(212) 751-2600
Fax: (212) 572-2593

Private Company
Founded: 1925
Employees: 3,500
Sales: $290 million
SICs: 2731 Book Publishing

The largest general trade book publisher in the English-speaking world, Random House, Inc. posted sales of $290 million in 1992. Working in concert or at times in competition, Random Houses 10 independent book groups have represented dozens of the worlds most renowned authors and won virtually every distinguished literary award. In the mid-1990s, Random House prepared for the future by establishing a New Media Division to track the latest advances in electronic media and their varied applications for publishing.

When Bennett A. Cerf and Donald S. Klopfer decided to rename their joint publishing venture Random House, Inc. (RH) in 1927, its pedigree was already well established. The 27-year-old Cerf and his 23-year-old partner had purchased the 109-volume Modern Library line in 1925 for $215,000 from the Boni & Liveright publishing firm in New York. Since 1923, Cerf had worked at Boni & Liveright as a vice president (replacing Richard L. Simon, who left to form a joint venture with M. Lincoln Schuster), and he had become increasingly aware of the series value and potential. When Horace Liverights financial problems grew untenable and forced him to sell the seven-year-old Modern Library, Cerf and Klopfer jumped at the opportunity.

Inspired by Everymans Library, founded in 1905 by Londoners Joseph Malaby Dent and Ernest Rhys, Modern Library was already considered a classic in its time. Cerf and Klopfer replaced the companys logo with a leaping torchbearer designed by Lucian Bernhard, bound the books in cloth instead of the original navy lambskin, and recouped their initial investment within two years. The partners soon changed the companys name toRandom House to reflect their intention of publishing a wide array of fiction and nonfiction without limitations. In 1931, Cerf and Klopfer created the Modern Library Giants, a collection of the most significant and thought-provoking books in modern literature, as a sibling series of longer classics, like Leo Tolstoys War and Peace and Victor Hugos Les Miserables. The partners also produced a few deluxe editions, like the Rockwell Kent-illustrated version of Voltaires Candide and a lavish version of Mark Twains Adventures of Tom Sawyer, yet these indulgences were discontinued when the Depression took a firm hold of the economy.

Moving into less-expensive trade books, Cerf immediately set out to sign up the days literati, including playwright Eugene ONeill and poet Robinson Jeffers. Cerf also flew overseas to secure U.S. publishing rights to James Joyces Ulysses. When his unexpurgated copy of the book was seized by customs as obscene material upon his return, Cerf and attorney Morris Ernst gained international acclaim by taking the case to court. On December 6, 1933, Judge John Woolsey issued a decision with historic implications by upholding Cerfs right not only to possess the book, but to publish an uncensored version of Ulysses in America. Cerfs precedent-setting crusade made RH a household word, and the Modern Librarys Ulysses was published in 1934.

In 1936, RH purchased Robinson Smith & Robert Haas, Inc. and netted several prominent authors in the process, including Isak Dinesen, William Faulkner, Edgar Snow, and Jean de Brunhoff. The acquisition of de Brunhoff, creator of the popular Babar series, proved both timely and prescient, as RH expanded into childrens books. After World War II ended, RH sought both domestic and international expansion, beginning with the establishment of Random House Canada and the development of a college books division in 1944. In 1947, after years of research and at a cost of over $500,000, RH published the American College Dictionary, the first of its many reference books. Continuing in this vein but directing its efforts toward children, RHs think tank initiated a series of Landmark Books about legendary Americans in 1950. Written by famous authors like Pearl S. Buck, C. S. Forester, and John Gunther, the line was expanded in 1953 to cover historic world events and leaders.

RHs childrens division published a picture book in 1957 called The Cat in the Hat by Dr. Seuss. Simple and silly, the book was so successful it was reprinted in 1958 as the first of a new line christened Beginner Books. The series enjoyed huge success, becoming an enduring favorite for new readers and remaining a staple of libraries and bookstores to this day. The same year, RH hired Saxe Commins as its editor-in-chief. With Mr. Commins counsel and Mr. Cerfs instincts, Alden Whitman of the New York Times observed, Random House began to grow into one of the giants of the books business.

In 1959, RH went public with an offering of over 220,000 shares at $11.25 each, with Cerf selling about a third of his stock (he kept 200,000 shares). Much of the proceeds went into rapid expansion, beginning with the 1960 acquisition of Alfred A. Knopf for about $3 million. In Knopf, RH gained one of the nations most distinguished and respected publishers. Cerf assured the new subsidiary of complete editorial independence, and he and Knopf forged a close alliance, both professionally and personally, that endured for decades. RHs second major acquisition was textbook producer L. W. Singer, which was followed by Helen and Kurt Wolffs brainchild, the 19-year-old Pantheon Books, in 1961. Andre Schiffrin was named editor-in-chief of Pantheon in 1963 at the age of 28.

In 1965, the first of several significant events affecting RHs future occurred. In a curious role reversal, the acquisitive RH was purchased by Radio Corporation of America (RCA). Cerf became chairman of the board following the sale, and he relinquished the presidency to protege Robert L. Bernstein the next year. Though the buyout was one of mingled sadness and joy for Cerf, he was pleased with RHs record earnings and happy to end the companys independence in a blaze of glory. In 1966, one of the companys crowning achievements came to fruitionthe unabridged, 2,059-page Random House Dictionary of the English Language, which took more than 10 years to research and compile at an estimated cost of $3 million, was published. It sold well over 500,000 copies within the next five years.

The changing of the guard was nearly complete in 1969, when RH moved from the old Villard House on Madison Avenuea historic landmark located behind St. Patricks Cathedralto the companys current location at 201 East 50th Street. Cerf stepped down as chairman the following year, with his longtime friend and colleague Klopfer taking over. Cerf remained at RH as a senior editor until his death in 1971, at age 73. Called a glorious amalgam of pragmatist and leprechaun by John Daly, former host of Whats My Line? a television game show on which Cerf had been a panelist for 16 yearsthe RH founder was a popular man whose funeral was a veritable whos who of the publishing and show business worlds. I wonder, Eudora Welty mused, if anyone else of such manifold achievements in the publishing world could ever have so many friends.

With Bernstein and Klopfer running the ship, RH continued to flourish. In 1971, the Modern Library exceeded 400 titles and sold 50 million books. The 1973 acquisition of mass marketer Ballantine Books added considerably to RHs paperback audience. Seven years later, RH was again on the receiving end of a takeover, this time by Advance Publications, Inc., part of the Newhouse familys vast holdings, which purchased the publisher from RCA for $70 million. The next decade was one of extraordinary growth, marked by the 1982 purchase of Fawcett Books, the 1983 founding of Villard Books, and the 1984 acquisition of Times Books from the New York Times Company. In 1985, RH launched its AudioBooks division, drawing on the companys extensive backlist to create abridged and unabridged cassette recordings.

RH continued to expand its reach with the 1986 purchase of Fodors Travel Guides and the 1987 acquisition of Chatto, Virago, Bodley Head & Jonathan Cape, Ltd., a prestigious British publishing group. With companies like Bantam and Simon & Schuster becoming more involved overseas, we had a feeling we should do something ourselves, Bernstein told Publishers Weekly. As with previous mergers, the companies remained autonomous but also stood to benefit immensely from the alliance for subsidiary rights and other negotiations. Also in 1987, RHs renowned Pantheon Books and the newly acquired Schocken Books were merged editorially.

The following year, RH once again expanded its holdings by acquiring the large, respected Crown Publishing Group, comprised of Crown Books, Clarkson N. Potter, Inc., Harmony Books, and the Outlet Book Company. In 1989, the company experienced its second changing of the guard when Bernstein departed RH after 23 years. His replacement as president, chairman, and CEO was Alberto Vitale, former head of rival Bantam Doubleday Dell (BDD). Among Vitales immediate concerns were trimming the fat and overhauling RHs operations. Additionally, Vitale focused RH on the 21st century by diversifying into the burgeoning electronic field and developing multimedia products. This year also saw further U.K. expansion with the acquisition of Century Hutchinson, Ltd., which along with the Chatto, Virago, Bodley Head and Cape group became Random House UK, with subsidiaries in Australia, New Zealand, and South Africa.

In his continuing efforts to streamline the company, Vitale set his sights on the ailing Pantheon Books. Since Bernsteinone of Pantheons most ardent supporterswas gone, the industry was rife with rumors of the imprints imminent dissolution. Andre Schiffrin, Pantheons directional force for 28 years, resigned in 1990 after refusing to go along with Vitales cost-cutting measures. His departure stirred up a storm of controversy, as Studs Terkel (Pantheons bestselling author), E. L. Doctorow, Barbara Ehrenreich, Kurt Vonnegut, and 350 others staged a demonstration in front of RHs offices, while another 300 writers signed a letter of protest on Pantheons behalf. In response, Vitale told Publishers Weekly, I want to most emphatically reaffirm Random Houses commitment to maintaining Pantheons position as one of our most prestigious imprints and to insuring its continuity and success in the future. Vitale soon hired Erroll McDonaldwho had criticized the demonstrators in an op-ed piece for the New York Times as the new executive editor of Pantheon, and the imprint continued with a smaller staff and fewer projected titles.

In 1992, Vitale raided his former employers legions to hire William Wright, who became his right-hand man as RHs executive vice president and chief operating officer. Also during this year, RH founded two new imprints under the Ballantine groups umbrella: One World, to produce culturally diverse originals and reprints in hardcover and trade paperback; and Moorings, to publish hardcover and trade paperbacks with a Christian, devotional, or inspirational leaning. Yet 1992s biggest news was the renaissance of the Modern Library, with the reintroduction of 27 volumes, complete with new bindings and reset pages, to celebrate the series 75th anniversary. Simultaneously, those at Knopf put the finishing touches on the revival of Everymans Library, the long-dormant hardcover classics once published by Dutton that were the original model for RHs own Modern Library series. Though there was some concern about competition, Jane Friedman, president of RH Audio, posited, Would [we] have been any happier if some other publisher had brought out Everymans?

Once again solidifying assets and looking for more, Vitale engineered the purchase of BDDs Bantam Electronic Publishing in 1993. The move was intended to beef up RHs own electronic division, or as Vitale told Publishers Weekly, to create more critical mass in a field that, while evolving, is here to stay. As proof of his commitment, Vitale formed RHs New Media Division to identify and pursue multimedia opportunities and installed Randi Benton as its president. Additionally, RH formed several joint ventures in 1993, including one to distribute the National Geographic Societys books; a second with Broderbund to create and market story-based multimedia software for children; and another between RHs Electronic Publishing division and Prentice Hall to produce and market a line of computer-oriented books under the newly established imprint of Hewlett-Packard Press. RH continued its trend of acquisition and reorganization in 1994 and 1995.

Through the decades, RH has embraced virtually every facet of publishingfrom hardcover to electronic media, and from adult to juvenileand has brought many renowned writers to the attention of a worldwide audience. The small company that was built on the foundation of the Modern Library to publish selected books at random grew through acquisitions to become a vast empire.

Principal Subsidiaries

Alfred A. Knopf Inc.; Ballantine Books, Inc.; Clarkson N. Potter Inc.; Crown Publishing Group; Fodors Travel Publications, Inc.; Pantheon Books; Random House AudioBooks; Random House Reference and Electronic Publishing; Random House Inc. Home Video Division; Random House Canada; Alfred A. Knopf Canada; Random House UK.

Further Reading

Alter, Jonathan, The Rumble at Random House, Newsweek, October 26, 1987, p. 62.

Bennett Cerf, Current Biography, New York: H. W. Wilson, 1958, pp. 82-83.

Cerf, Bennett, At Random: The Reminisces of Bennett Cerf, New York: Random House, 1977.

Dahlin, Robert, Joint Venture Sparks Audubon Book and Tour, Publishers Weekly, December 7, 1992, pp. 21-22.

Feldman, Gaye, A Conversation with Crowns Ann Patty, Publishers Weekly, August 22, 1994, pp. 22-23.

Giddins, Gary, Why I Carry a Torch for the Modern Library, New York Times Book Review, December 6, 1992, pp. 42-43.

Milliot, Jim, Ballantine Publishing Group Posts Record Year in 1993, Publishers Weekly, January 17, 1994, pp. 20-21.

_____, Outlet Book Co. Becomes RH Value Publishing, Publishers Weekly, April 4, 1994, p. 12.

Model, F. Peter, A Volvo, Not a Caddy: The Modern Librarys Second Coming, Wilson Library Bulletin, December 1992, pp. 66-68.

Mutter, John, Del Rey Creates Cybercommunity, Publishers Weekly, December 19, 1994, pp. 18-19.

Oder, Norman, Looking behind Ann Godoffs Bestselling Spring Leap, Publishers Weekly, July 4, 1994, pp. 23-24.

Random and Prentice Hall Sign Joint Deal with Hewlett-Packard, Publishers Weekly, March 15, 1993, p. 9.

Random House Acquires Bantam Computer Books, Publishers Weekly, May 24, 1993, p. 25.

Random to Distribute National Geographic Titles to Stores, Publishers Weekly, May 24, 1993, p. 26.

Raymont, Henry, Cerf Rites Draw Friends of Two Worlds, New York Times, September 1, 1971, p. 40.

Reilly, Patrick M, Godoff Named Editorial Chief at Random House, Wall Street Journal, January 13, 1995, p. B2.

Reuter, Madalynne, After the Un-Random Showdown, Publishers Weekly, October 30, 1987, p. 11.

_____, Schiffrin to Leave Pantheon Books, Publishers Weekly, March 9, 1990, p. 10.

_____, and Marianne Yen, Random House to Acquire Chatto, Virago, Bodley and Cape Group, Publishers Weekly, May 15, 1987, p. 114.

Shapiro, Laura, Publisher at the Barricades, Newsweek, March 19, 1990, p. 71.

Short Shrift, Economist, March 10, 1990, p. 102.

Whitman, Alden, Bennett Cerf Dies; Publisher, Writer, New York Times, August 29, 1971, pp. 1, 56.

Taryn Benbow-Pfalzgraf