News Corp, owned by good old baddy Rupert Murdoch — AND just coming off a scandal in Jolly Old England (remember his News of the World tabloid having to go out of business due to its illegal spying and wiretapping?) just happens to be the parent to HarperCollins, the suiter for Simon & Schuster — Hell, this might be publishing intrigue cubed !

What all this means is a great deal of intrigue is present and accounted for in the traditional publishing world’s positioning itself as best it can to defuse Amazon’s growing digital publishing threat.

This by CHRISTOPHER S. STEWART and JOHN JANNARONE in The Wall Street Journal (also owned by baddy Rupert):

News Corp. Eyes Book Publisher

News Corp NWSA +0.17%., owner of HarperCollins Publishers, has expressed interest to CBS Corp. CBS +0.84%about acquiring its Simon & Schuster book business, according to people familiar with the talks.

The people described the discussions as preliminary and cautioned that a deal isn’t imminent. News Corp. owns Dow Jones & Co., which publishes The Wall Street Journal.

The conversations come about a month after the owners of two publishing rivals, Random House and Penguin Group, agreed to merge their books businesses into a publishing powerhouse.

News Corp. made a last-minute expression of interest in buying Pearson PSON.LN +0.42%PLC’s Penguin but never made a formal offer. Instead, Penguin agreed to combine with Bertelsmann SE & Co.’s Random House.

For book publishing, an industry dominated by a half-dozen big companies, consolidation is viewed in part as a way to weather the transition to digital media. Combining forces can allow publishers to gain more heft in negotiating terms with retailers, including Amazon.com Inc., industry executives say.

Simon & Schuster, which was founded in 1924 and publishes about 2,000 titles annually, had $1.6 billion in revenue and $90 million in earnings before interest, taxes, depreciation and amortization in 2011, according to CBS regulatory filings.

News Corp. is in the process of splitting into two listed companies, one containing its entertainment assets, such as the 20th Century Fox film studio and Fox News cable channel, and the other housing publishing assets, including Dow Jones and HarperCollins.

While HarperCollins is relatively small to News Corp. in the media giant’s current form, it could account for more than a fifth of the new publishing company’s roughly $500 million of operating income for the fiscal year ending in June 2013, according to Michael Nathanson of Nomura Securities.

The new publishing company is expected to have a significant amount of cash on its balance sheet, potentially to be used for acquisitions. One motivation for the split is the flexibility to pursue the purchase of old-media companies that may have turned off current News Corp. investors, according to a person familiar with the company’s strategy.

News Corp. recently has shown an appetite in other sectors as it prepares for the split, which is expected to be completed by next June. On Tuesday the company said it had agreed to buy a 49% stake in New York regional sports network YES.

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