When Penguin and Random House announced in the fall of 2012 that they intended to merge, Hurricane Sandy was barreling toward New York City, America’s publishing capital. It was an instant metaphor for headline writers: “As Sandy Loomed, the Publishing Industry Panicked.” People inside both companies worried about their jobs; people outside the companies worried about the market power of a new conglomerate comprised of the country’s two largest trade publishers. Agents and authors, meanwhile, worried that the consolidation would further drive down advances.

Random House’s top brass insisted that there was no need to panic. “The continuity will far outweigh the change,” Markus Dohle, the CEO of what would become Penguin Random House, told The New York Times when the merger was completed the following summer. “We have the luxury to take the time before we make any strategic decisions. There is no need to rush.”



This has been the story of Penguin Random House these past five years. Privately owned, the company has moved deliberately, while publicly traded competitors like HarperCollins (which is owned by News Corp) and Simon & Schuster (CBS) have had to fend off pressures from shareholders. It has not used its gargantuan size—it controls more than half of the traditional literary marketplace according to many estimates—to take back territory from Amazon. Instead, it has focused on building equity and ensuring that it publishes the next generation of bestsellers. In so doing, Penguin Random House has built what may be the perfect corporate publishing house. There’s just one problem: Thanks to Amazon, the age of the imperious corporate publishing house is coming to an end.



In July of this year, on the fifth anniversary of the merger, Dohle took a victory lap. Publishers Weekly touted Penguin Random House’s size ($3.4 billion in sales, 275 imprints, 700 million books sold a year, 14,000 new releases, 10,000 employees), prestige (60 Nobel laureates), and the seamlessness of the merger itself. Given the size of the two companies involved, it had the potential to be a logistical and cultural nightmare. But according to Dohle, it was an organic effort. “We literally designed and implemented the merger together as a team without all of the consultants and external advisers of usual mergers,” Dohle told Publishers Weekly. “Doing it our way meant that the new Penguin Random House became ‘our’ company. Designed and implemented by us.”



The point of a Penguin Random House is to create scale. It is larger than its four biggest rivals combined, and its sheer size gives it leverage to promote and sell books. “We are able to leverage scale in direct marketing to consumers and in our supply chain to support our retailers and to get our books into the hands of readers quickly,” Penguin Random House spokesperson Claire Von Schilling told me in an email. “We have the largest book sales force in the world, with unparalleled reach into every different kind of bookseller globally.”

