Will Random House's New M&A Exec Expand or Shrink the Publisher?

It's been a busy few weeks for Random House, the largest publisher in America and a division of Bertselmann. Not only has the company reorganized management considerably, shuffling executives around and adding more heft to its digital publishing department, it has also consolidated Ballantine, Bantam and Dell -- three imprints associated with the post-World War II mass market paperback boom -- into a single entity.

But today's personnel announcement from CEO Markus Dohle may be the most curious. As part of a series of corporate development appointments, there's a brand-new position near the top of the company: Vice-president, mergers & acquisitions. In the role is Milena Alberti, a longtime executive with Random House who has served as director of Spanish language publishing since 2004 and before then, director of corporate development.

In her new position, which reports to CFO Anne Davis, Alberti "will be responsible for identifying and evaluating existing businesses which can strengthen and complement [Random House's] print and digital publishing and increase our market share in both," according to Dohle.

Hungry for More?

Consolidation has been the strategy of Random House's parent company Bertelsmann throughout the 1980s and 1990s. Most famously, in 1998, it scooped up Random House -- which had long owned imprints Knopf and Pantheon -- and tucked it under the same umbrella as Bantam (acquired in 1980), Doubleday (1986), and Crown (1988), creating the behemoth we know today.

More recently, Random House has added Monacelli, Watson-Guptill, and Ten Speed Press as imprints -- but they've also sliced and diced internally, like the late 2008 consolidation of five key divisions into three (Crown Publishing Group, Random House Publishing Group and Knopf Doubleday).

"Recessionary times present promising external portfolio-growth and new-business opportunities," Dohle said, and his announcement suggests the publisher is looking to add more companies to Random House's still-groaning portfolio. Businesses that may be particularly attractive to Random House are those that help streamline and strengthen back-end functions making digital publishing a lot less onerous.

"Trying to Get Control of the Beast"

But Dohle's prior experience at Bertelsmann was running Arvato, stripping inefficiencies out of that company's printing business and adding profit margin. Applying such tactics to remaking Random House, however, needs to factor in more complicated elements like authors, editors and books.

Take what happened with the consolidation of Ballantine, Bantam and Dell. It resulted in quite some chaos, with trimmed lists and greater emphasis on fewer books driving many Random House authors -- even some marquee names who can make or break annual budgets -- to look for greener pastures.

In this environment of sustained streamlining, speculation is rampant that Alberti's new M&A position may not be one responsible for bringing additional companies into the fold, but finding ways to make Random House leaner, meaner, and less populated with imprint names.

"Dohle is all about core businesses, consolidation and trying to get control of the beast," one industry insider told DailyFinance. Control, in this case, may be about separating out chaff instead of buying more wheat.