Simon & Schuster Inc. Business Information, Profile, and History
New York, New York 10020
History of Simon & Schuster Inc.
Simon & Schuster Inc. became a division overseeing the publishing operation of Viacom, Inc., one of the world's largest entertainment and media companies, when it was acquired in 1994 as part of Paramount Communications. Simon & Schuster is the world's largest publisher of educational books, computer books, and books published in the English language. It has operations in 43 countries, and its book and multimedia products are distributed in 150 countries. The imprints of its educational publishing division include Allyn and Bacon, Computer Curriculum Corporation, Educational Management Group, Globe Fearon, Modern Curriculum, Modem Curriculum Press, Prentice Hall, Silver Burdett Ginn, and Simon & Schuster Custom Publishing.
Simon & Schuster is also a leader in publishing consumer, business, reference, and professional books under these imprints: Simon & Schuster, Pocket Books, The Free Press, Scribner, Jossey-Bass, The New York Institute of Finance, Prentice Hall Direct, Bureau of Business Practice, Simon & Schuster Children's Publishing, and Macmillan Publishing USA. In addition, the company is involved in electronic and customized publishing; it operates an online service for consumer books and an online subscription service for professional development of kindergarten through grade 12 teachers.
Richard L. Simon and M. Lincoln Schuster founded the company in January 1924. Their first publication--at the suggestion of Simon's aunt, a crossword puzzle enthusiast--was The Crossword Puzzle Book, which came out in April. The book sold more than 100,000 copies, and Simon & Schuster followed it with three other crossword puzzle books in the company's first year. All four books were top nonfiction bestsellers, and by the end of the year Simon & Schuster had sold more than a million of them.
The puzzle books were highly profitable, but the craze eventually waned and Simon & Schuster had to diversify. Its first few efforts produced moderate successes, a tennis book by Bill Tilden and an investment guide by Merryle Stanley Rukeyser, and several failures, such as a novel called Harvey Landrum and a biography of Joseph Pulitzer. The company's first big success outside of the puzzle books was Will Durant's The Story of Philosophy, a bestseller in 1926 and 1927. The book established Simon & Schuster as a serious publishing company and led to Durant's authoring, with his wife, Ariel, the multivolume Story of Civilization series for Simon & Schuster over the next half-century.
Simon & Schuster quickly developed a reputation as a highly commercial publishing house (one successful project was a compilation of the "Ripley's Believe It or Not" newspaper cartoon features) but at the same time brought out many distinguished works. In its first two decades, Simon & Schuster output included Leon Trotsky's History of the Russian Revolution, Felix Salten's Bambi, Rachel Carson's Under the Sea Wind, Wendell Willkie's One World, and three volumes of the Durants' Civilization series. Simon & Schuster had a Pulitzer Prize winner in 1935, Now in November by Josephine Johnson. Other achievements of the early years were the publication of a collection of George Gershwin's songs, followed by similar compilations of the works of Noel Coward, Cole Porter, Jerome Kern, the team of Richard Rodgers and Lorenz Hart, and Rodgers's later teaming with Oscar Hammerstein II, as well as the Treasury series of oversized gift books, such as 1939's A Treasury of Art Masterpieces, followed by similar books on the theater, oratory, and the world's great letters. Aside from the founders, key figures in Simon & Schuster's early years were Leon Shimkin, the company's business manager, and Clifton Fadiman, editor-in-chief. While Fadiman left in the mid-1930s and achieved fame as a book reviewer and radio quiz-show host, Shimkin became an equal partner, financially and operationally. With the founders, he stayed on for many years and was highly influential in the company. In the late 1930s, he brought in two highly successful properties--Dale Carnegie's How to Win Friends and Influence People and J.K. Lasser's Your Income Tax.
In 1939 Simon, Schuster, and Shimkin put up 49 percent of the financing for Robert F. de Graff, an experienced publisher of hardcover reprints, to start Pocket Books, a line of inexpensive, mass-market paperback reprints. Although paperback books had appeared in the United States as far back as the 1770s, the format's full potential was not realized until the founding of Pocket Books, which was followed by several competitors. Initially priced at 25¢ a copy, Pocket Books became a great success--during World War II, various wartime agencies shipped 25 million Pocket Books overseas. Shimkin was able to weather wartime paper rationing by taking over the paper quotas of publishing companies that were not able to use their entire allotment.
Five of Pocket Books's initial 11 titles remain in print: William Shakespeare's Five Great Tragedies, Pearl S. Buck's The Good Earth, James Hilton's Lost Horizon, Agatha Christie's The Murder of Roger Ackroyd, and Felix Salten's Bambi. Eventually, Pocket Books published original titles as well as reprints of hardcover books; its most successful publication was Dr. Benjamin Spock's Baby and Child Care, first printed in 1946. Periodically updated, more than 33 million copies of this book had been printed by 1989. Pocket Books was merged into Simon & Schuster in 1966.
In 1942 Simon & Schuster started another line of inexpensive books, Little Golden Books, aimed at children. Full-color, high-quality children's books had not been available at such low prices--Little Golden Books, like Pocket Books, went for 25¢ a copy. Simon & Schuster was able to keep costs down by running 50,000 copies per title, an unheard of quantity. Simon & Schuster handled editorial, art, and sales functions for the books, and Western Printing and Lithographing Company took care of production and manufacturing. The venture was highly successful; by 1958 more than 400 million Little Golden Books had been sold, and the line had spawned such offshoots as Big Golden Books, Giant Golden Books, the Golden Encyclopedia, and Little Golden Records. Perhaps fearing a shakeout in the expanding children's book industry, or enticed by Western Printing's offer, Simon & Schuster sold its half interest in the venture to Western Printing in 1958.
Acquisition in the 1940s
In 1944 Field Enterprises, the Chicago communications company headed by Marshall Field, acquired Simon & Schuster from its principals--Simon, Schuster, and Shimkin--for about $3 million. The principals stayed on with long-term management contracts and operated quite independently of Field Enterprises. In 1957, shortly after Marshall Field's death, the executors of his estate were eager to get out of the book publishing business and sold Simon & Schuster back to the principals for $1 million.
Major titles published by Simon & Schuster in the 1940s and 1950s included William L. Shirer's The Rise and Fall of the Third Reich, Evan Hunter's The Blackboard Jungle, Meyer Levin's Compulsion, Kay Thompson's Eloise, Joseph Davies's Mission to Moscow, Mary McCarthy's story collection The Company She Keeps, Alexander King's Mine Enemy Grows Older, Herman Wouk's first book, Aurora Dawn, Laura Z. Hobson's Gentleman's Agreement, and Sloan Wilson's The Man in the Gray Flannel Suit. Humorous books also were important to the publishing house; these included cartoon collections by Walt Kelly, creator of "Pogo," and Al Capp of "Li'l Abner" fame, as well as verbal humor from James Thurber, P.G. Wodehouse, and S.J. Perelman. Moving into the 1960s, Simon & Schuster's popular authors included Harold Robbins, Jacqueline Susann, and Joseph Heller.
In 1957, Richard Simon, who was in poor health, retired from Simon & Schuster. He died in 1960, at which time Schuster and Shimkin each acquired half of his stock, making them equal partners of the company. When Schuster retired in 1966, he sold his share to Shimkin. Simon & Schuster subsequently went public, with its stock traded on the over-the-counter market and later listed on the American Stock Exchange.
Changing Leadership in the 1970s
In the next few years, Simon & Schuster negotiated with several potential acquirers. In May 1970, the company agreed in principle to be bought by Norton Simon Inc., a diversified company whose interests included magazine publishing; the deal fell apart two months later, however, in part because of the stock market's drop. In November of that year, Kinney National Service Inc. reached an agreement in principle to buy Simon & Schuster, but Shimkin became dissatisfied with the offer during the negotiation process. In 1974, Simon & Schuster agreed to a merger with Harcourt Brace Jovanovich, which had substantial textbook publishing operations but little in trade publishing, which was Simon & Schuster's strength. The deal was called off abruptly later that year; both parties cited the depressed stock market as a reason, but observers said Shimkin had been offended by certain public statements made by William Jovanovich: "He implied that his firm was taking over Simon & Schuster lock, stock, and barrel, and one got the impression that Leon Shimkin would be fortunate if he got a job in the mailroom," longtime Simon & Schuster executive Peter Schwed later wrote in his book, Turning the Pages: An Insider's Story of Simon & Schuster, 1924-1984.
A successful deal came through in 1975, when Gulf + Western Industries purchased Simon & Schuster through a swap of one share of Gulf + Western stock for every ten shares of the publishing company. Gulf + Western, which also owned Paramount Pictures, changed its name to Paramount Communications in 1989. As a condition of the deal, Richard E. Snyder, who had been executive vice-president of Simon & Schuster, moved up to the presidency; Snyder succeeded Seymour Turk, who had been named president in 1973 when Shimkin relinquished that role. Shimkin remained chairman of Simon & Schuster.
Under Snyder, Simon & Schuster expanded aggressively. It set up a dozen new imprints, or brand names, under which it published books, and its sales grew impressively, from $44 million at the time of the sale to Gulf + Western to $210 million in 1983. By 1989, revenues were up to $1.3 billion. One of the most financially successful new ventures was a line of romance novels called Silhouette Books. Simon & Schuster launched Silhouette in the early 1980s after it lost the U.S. distribution rights to the Harlequin Romances, published by Harlequin Enterprises Ltd. of Toronto. Silhouette soon rivaled Harlequin in popularity among romance readers, and Harlequin's parent, Torstar Corporation, bought Silhouette from Simon & Schuster for $10 million in 1984.
Simon & Schuster entered the textbook field in 1984 by buying Esquire Inc., which no longer owned Esquire magazine, for $170 million. The acquisition nearly doubled the Simon & Schuster staff, to 2,300, and lifted it to the nation's sixth largest book publisher, from thirteenth. Later that year, Gulf + Western bought Prentice Hall Inc., a major textbook publisher, for about $710 million and merged it into Simon & Schuster early in 1985, making Simon & Schuster the nation's largest book publisher. Ginn & Company, another educational publisher, came into the Simon & Schuster fold in 1982, after being bought by Gulf + Western for $100 million; in 1986, Gulf + Western bought Silver Burdett Company, an elementary textbook publisher, for about $125 million and combined its operations with Ginn. Software also became an important business for Simon & Schuster in the increasingly computerized decade of the 1980s, as did books on computers.
With the diversification into textbooks and information services, trade book publishing, which was Simon & Schuster's only business at the time of the sale to Gulf + Western, became only a small part of the business, or about six percent of sales in 1989. It remained a high-profile aspect of the company, however, which published both fiction and nonfiction books that ranged from highly commercial to highly prestigious efforts. Major titles in the 1970s and 1980s included Bob Woodward and Carl Bernstein's All the President's Men and The Final Days, Woodward's Wired and VEIL: The Secret Wars of the CU, 1981-87, Jackie Collins's Hollywood Wives, Taylor Branch's Parting the Waters, and former U.S. President Ronald Reagan's An American Life.
The 1990s and Beyond
By 1997, the publisher could boast that it had published 69 Pulitzer Prize winners. The trend in the publishing industry was not in traditional print publishing, however, but toward electronic publishing, or any computer-related materials. In 1996, President and CEO Jonathan Newcomb stated that the company's goal was to generate half of its revenues from electronic publishing, such as via CD-ROMS, videodisks, and the World Wide Web, by the year 2000. At the time, the percentage was 25 percent, but Newcomb set about achieving this goal by creating Corporate Digital Archive (CDA). CDA involved a reorganizing of the publisher's editing, production, and other processes so that everything could be categorized in databases. The archive then allowed material to be recalled and manipulated as desired by any division of the company.
With all of the editorial content owned by Simon & Schuster, the next step was to translate it into software. In 1997, Simon & Schuster Interactive, the consumer software publishing unit of Simon & Schuster Consumer Group opened in 1994, formed a joint venture with GT Interactive Software Corp. The aim was to develop PC titles derived from the interactive and electronic properties cited in the Consumer Group catalogue and market them globally.
In the same year, Simon & Schuster sold part of American Teaching Aids Inc., the unit that publishes teacher resource materials, to Frank Schaffer Publications. The development of new media for teachers continued, however. Simon & Schuster's Education Group announced the formation of an internet resource, Edscape (www.edscape.com), a subscription service that delivers interactive curriculum content for teachers of grades kindergarten through 12, as well as online professional development. College-level instructors were included in another venture formed by Prentice Hall and Xilinx, Inc., a supplier of programmable logic solutions. The agreement allowed the two companies to produce the Xilinx Student Edition, the first complete digital design learning environment for college-level instruction.
Principal Divisions: Education; Consumer Group; International and Business and Professional; Macmillan Publishing USA.
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