Random House, Inc.

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Random House, Inc.

201 East 50th Street
New York, New York 10022
U.S.A.
(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 House’s 10 independent book groups have represented dozens of the world’s 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 Liveright’s financial problems grew untenable and forced him to sell the seven-year-old Modern Library, Cerf and Klopfer jumped at the opportunity.

Inspired by Everyman’s 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 company’s 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 company’s name to“Random 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 Tolstoy’s War and Peace and Victor Hugo’s Les Miserables. The partners also produced a few “deluxe” editions, like the Rockwell Kent-illustrated version of Voltaire’s Candide and a lavish version of Mark Twain’s 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 day’s literati, including playwright Eugene O’Neill and poet Robinson Jeffers. Cerf also flew overseas to secure U.S. publishing rights to James Joyce’s 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 Cerf’s right not only to possess the book, but to publish an uncensored version of Ulysses in America. Cerf’s precedent-setting crusade made RH a household word, and the Modern Library’s 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 children’s 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, RH’s 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.

RH’s children’s 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. Cerf’s 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 nation’s 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. RH’s 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 RH’s 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 RH’s record earnings and happy to end the company’s independence “in a blaze of glory.” In 1966, one of the company’s crowning achievements came to fruition—the 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 Avenue—a historic landmark located behind St. Patrick’s Cathedral—to the company’s 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 What’s My Line? —a television game show on which Cerf had been a panelist for 16 years—the RH founder was a popular man whose funeral was a veritable who’s 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 RH’s 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 family’s 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 company’s extensive backlist to create abridged and unabridged cassette recordings.

RH continued to expand its reach with the 1986 purchase of Fodor’s 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, RH’s 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 Vitale’s immediate concerns were trimming the fat and overhauling RH’s 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 Bernstein—one of Pantheon’s most ardent supporters—was gone, the industry was rife with rumors of the imprint’s imminent dissolution. Andre Schiffrin, Pantheon’s directional force for 28 years, resigned in 1990 after refusing to go along with Vitale’s cost-cutting measures. His departure stirred up a storm of controversy, as Studs Terkel (Pantheon’s bestselling author), E. L. Doctorow, Barbara Ehrenreich, Kurt Vonnegut, and 350 others staged a demonstration in front of RH’s offices, while another 300 writers signed a letter of protest on Pantheon’s behalf. In response, Vitale told Publishers Weekly, “I want to most emphatically reaffirm Random House’s commitment to maintaining Pantheon’s position as one of our most prestigious imprints and to insuring its continuity and success in the future.” Vitale soon hired Erroll McDonald—who 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 employer’s legions to hire William Wright, who became his right-hand man as RH’s executive vice president and chief operating officer. Also during this year, RH founded two new imprints under the Ballantine group’s 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 1992’s 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 Everyman’s Library, the long-dormant hardcover classics once published by Dutton that were the original model for RH’s 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 Everyman’s?”

Once again solidifying assets and looking for more, Vitale engineered the purchase of BDD’s Bantam Electronic Publishing in 1993. The move was intended to beef up RH’s 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 RH’s 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 Society’s books; a second with Broderbund to create and market story-based multimedia software for children; and another between RH’s 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 publishing—from hardcover to electronic media, and from adult to juvenile—and 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; Fodor’s 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.