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Harcourt To Buy

Balance of Shares

In Steck-Vaughn

CHESTNUT HILL, Mass/EARLY JULY '97--Harcourt General, Inc. (NYSE:H) has announced plans to purchase 2.6 million shares of outstanding stock in Steck-Vaughn Publishing Corporation (NASDAQ:STEK) at $14.00 per share in cash. The offer must first be reviewed by independent directors of Steck-Vaughn and approved by the full board.

As a result of Harcourt General's merger with National Education Corporation (NEC) earlier this month, Harcourt now owns about 82% of Steck-Vaughn's 14.5 million outstanding shares.The latest offer includes the 2.6 million remaining shares not already owned by NEC.

The $14 share price represents a 33% premium over the market value of Steck- Vaughn stock immediately before Harcourt General announced its intention to acquire NEC and the outstanding Steck-Vaughn shares.

Reflecting the new ownership structure, the Steck-Vaughn board now includes four Harcourt General officers: Richard A. Smith, chairman and chief executive officer; Robert A. Smith and Brian J. Knez, co-presidents; and John R. Cook, senior vice president and chief financial officer. Four independent directors remain on the new Steck-Vaughn board: Leonard W. Jaffe, Manuel J. Justiz, N. Colin Lind and Michael R. Klein.

Steck-Vaughn is a full-service publisher of supplemental educational products. Harcourt General is a growth-oriented operating company with core businesses in publishing and specialty retailing.

News Corp Seeks

Joint Venture Deals

For HarperCollins

NEW YORK/ EARLY JULY '97--News Corp has confirmed that preliminary talks are underway with several major publishers to form a joint venture with its HarperCollins publishing unit.

A News Corp spokesman said the company has been approached by several publishers about a joint venture. The possibilities range from another publisher's purchase of a stake in HarperCollins, to merely the consolidation of back office operations such as distribution. However, no deals have been made.

News Corp chairman Rupert Murdoch has publicly said that News Corp. has no plans to sell HarperCollins outright.

Bertelsmann AG, Europe's largest media conglomerate, has been cited as a likely investor in HarperCollins, but Bertelsmann has not confirmed its interest.

National Computer

Acquires Two Units

From McGraw-Hill

NEW YORK,NY/EARLY JULY '97-- National Computer Systems, Inc. has acquired McGraw-Hill/London House and McGraw-Hill School Systems from The McGraw-Hill Companies (NYSE:MHP).

The two non-academic units--part of McGraw-Hill's Educational and Professional Publishing division--were sold as part of McGraw-Hill's strategy to focus on curriculum and professional development products.

McGraw-Hill/London House develops and markets human resources assessment materials, and McGraw-Hill School Systems, develops and markets administrative software for school districts and educators.

National Computer Systems, Inc. (NASDAQ:NLCS), based in Eden Prairie, MN., is an information services company providing software, services and systems for the collection, management and interpretation of data.

McGraw-Hill last year became the world's largest publisher of educational materials (kindergarten through post-graduate), with the acquisition of the Times-Mirror Higher Education Group.

Founded in 1888, The McGraw-Hill Companies is a leading information services provider, meeting worldwide needs in education, business, finance, the professions and government.

Study Shows

Sci Fi/Fantasy

Sales Decline

Sales for the science-fiction/fantasy category declined about 3% to $487 million in 1996, according to Trade Book Publishing 1997: Analysis By Category, a new report from Cowles/Simba Information.

It was the fourth consecutive year sales declined in the genre, which represents the sixth largest consumer publishing segment. The number of new books in the category also fell 10% in 1996 to about 1,100 titles.

The study showed a trend away from mass market paperbacks to trade paperbacks and hardcovers.

Spectra, an imprint of Bantam Doubleday Dell, garnered the highest sales in the category for 1996, followed by Simon & Schuster's Pocket Books. Random House was another category leader, publishing 60 titles in 1996 through Ballantine's Del Rey imprint.

Other leaders were Penguin's Roc, Putnam Berkley's Ace, St. Martin's Press' Tor imprint, HarperPrism, and Avon.

Book Imports

On The Rise,

Exports Dip

LATE JUNE '97--The US Department of Commerce reported an increase in book imports of 2.9% to $290.8 million in the first quarter of 1997. During the same period, book exports slipped 1.2% to $423.5 million.

Imports for seven book categories rose during the quarter, while seven others declined. Of the 15 leading import nations, at least four showed substantial increases in shipments for the quarter:

• China, up 59.1% to $13.5 million
• Canada, up 28.8%
• Spain, up 25.7%
• UK, up 3.6% to $70.1 million

South Korean shipments fell 36.9%.

On the export side, hardcover sales declined 35.7% to $34.7 million in the quarter. Encyclopedias fell sharply by 43.1% to $6.1 million. A Department of Commerce spokesman attributed the steep decline for printed reference materials to the popularity of CD-ROM and other electronic products.

Ten Publishers

Increase Share

Of US market

EARLY JULY '97--Ten leading US trade book publishers increased their market share in 1996, despite a generally flat overall market, according to the Book Publishers' Report Annual Trade Book Publishers ratings.

Overall share of the ten publishers for the US trade market (including mass market) increased from 67.9% in 1995 to 68.3% in 1996. The estimates are based on BPR and publisher-supplied figures.

Random House--the leading publisher of adult hardcover books and one of the five largest publishers of trade paperbacks, juvenile books and mass market titles--remained the largest US trade book publisher.

Simon & Schuster ranked as the second largest trade book publisher, mainly due to strong growth from its Macmillan Computer Publishing division, the report says.

Time Warner's trade book publishing division boosted net revenues to place third. Bantam Doubleday Dell (parent company, Bertelsmann) placed fourth, and Reader's Digest placed fifth.

HarperCollins ranked fourth, including including sales from Zondervan Publishing Group, the company's Christian book subsidiary.

British-based Pearson plc was fifth, with its Penguin USA imprint accounting for most of the growth. Sister company Addison Wesley Longman's general publishing unit contributed the balance. Penguin placed a total of 25 books on The New York Times' bestseller lists in 1996.

Putnam Berkley,though reporting a drop in 1996 revenues, ranked seventh. However, the company's acquisition by Pearson created a huge trade book operation that, if combined, would rank the company third for 1996.

Germany's Holtzbrinck's US-based trade book companies increased modestly in 1996. St. Martin's Press rose slightly, while sales at Henry Holt & Co. slipped. The smallest unit, Farrar, Straus & Giroux, enjoyed double-digit growth.

The report ranked the net revenues of the top 20 publishers, , ranking these from 11th through 20th:

• Rodale Press
• Golden Books
• Scholastic Inc
• Hearst Book Group
• Thomas Nelson, religious publisher
• Disney Publishing
• Barnes & Noble
• Andrews & McMeel
• IDG Books Worldwide
• Houghton Mifflin

BPR's annual rankings are included in Trade Book Publishing, 1997: Analysis By Category, a new report from Cowles/Simba Information. The report also includes a ranking of the 20 leading US consumer book publishers. For more information, contact Bill MacRae at 203-358-4248.

Microsoft

Press Unveils

New Series

REDMOND, WASH/ MID JULY '97 -- Microsoft Press -- the publishing division of Microsoft Corp. -- has announced the publication of a new series of books called the "Strategic Technology Series."

The concise guides are designed to provide powerful, easy-to-understand overviews for executives, entrepreneurs, managers and anyone serious about learning how technology will affect their ability to communicate and conduct business in the future.

"The 'Strategic Technology Series' was designed for busy professionals who may not have a background in information technology but who nevertheless have a responsibility to stay up-to-date and make decisions about their organization's strategic computing direction," said Jim Brown, publisher, Microsoft Press. "These books explain both the technology and terminology so managers and executives can make important decisions affecting the future of their organizations."

Microsoft Press is the publishing division of Microsoft Corp. and the leading source of up-to-date information about Microsoft products and related technologies. For information about other Microsoft Press products, visit http://mspress.microsoft.com/ on the Internet.

Founded in 1975, Microsoft (NASDAQ: MSFT) is the worldwide leader in software for personal computers.

Amazon.com,

Makes Ad Deal

With AOL, Yahoo

MID JULY '97-- Amazon.com, Inc. (NASDAQ: AMZN) and America Online, Inc. (NYSE: AOL) have announced a three- year comprehensive promotional agreement under which Amazon.com will be the exclusive bookseller on AOL.com and AOL's NetFind search engine.

Amazon.com has also signed an agreement with Internet media company Yahoo! Inc. under which Amazon.com will be the premier bookseller featured on Yahoo! And a similar deal has been cut between Amazon.com and the search engine, Excite.

Under the agreement with AOL, Amazon.com will receive a permanent "above-the-fold" front-screen button (visible without scrolling down) on the AOL.com homepage, the most visited site on the Web. The button will link users directly to Amazon.com (www.amazon.com), the leading online bookseller, where they will be able to review and purchase books.

In addition, Amazon.com and AOL will introduce a new navigational tool that will allow NetFind users to link directly to relevant Amazon.com search results pages through a hyperlink on every AOL NetFind Results page.

Amazon.com will also have broad exclusive promotional placement rights on AOL.com and NetFind, including a range of banner advertisements on selected NetFind Review Category pages and keyword categories.

In return, AOL will receive $19 million over three years, with the possibility of additional payments should Amazon.com sales revenues exceed thresholds specified in the agreement.

In the Yahoo deal, users will have direct links related to Amazon.com book titles from every Yahoo! search result. The new service on Yahoo, due to be launched this autumn, is designed to offer users the opportunity to review and purchase book titles from Amazon.com. It will initially be integrated throughout the Yahoo! site and its 11 metropolitan services.

Amazon.com, Earth's Biggest Bookstore, is the leading online retailer of books, offering a catalog of 2.5 million titles.

AOL.com, AOL's proprietary Website, is a comprehensive guide to everything online and the number one destination on the World Wide Web. It includes AOL NetFind, the company's Internet navigation solution that helps users go beyond merely searching to finding the information, productions and services they are looking for online.

America Online Networks is a division of America Online, Inc., based in Dulles, Virginia. America Online Networks oversees the America Online consumer online network, the world's most popular Internet online service, with more than 8 million members.

Mass Market

Trade Assn

Organizes

CHICAGO, IL/MID-JULY '97--A group of mass market book and magazine wholesalers has formed a new trade association called, Periodical Wholesalers of North America (PWNA).

US mass market book and magazine wholesalers were left without a trade association a year ago when the Council for Periodical Distributors of the Americas (CPDA), disbanded as a result of dramatic cuts in the number of mass market distributorships from 180 to 60.

The new group, Periodical Wholesalers of North America (PWNA), will have a 25 member board of directors, and will temporarily operate through its Toronto-based sister organization, Periodical Marketers of Canada (PMC). PWNA plas to hold a conference and trade show, styled "The New Marketplace," November 15-17 in Ottawa, in conjunction with PMC.

Periodical wholesalers are independent companies which handle distribuiona nd marketing of about 3,500 magazine titles and a full range of paperback books to retail newsstand outlets throughout North America.

The new organization is located at the PMC offices: 1007-175 Bloor St. East, South Tower, Toronto, Ontario M4W 3R8. Phone: 416-968-7218.

Galaxy Acquires

Internet Bookstore,

Books Now

PROVO, UTAH/EARLY JULY '97-- Galaxy Enterprises, Inc., of Provo, UT (NASDAQ-GLXY) has acquired Books Now, Inc., one of the Internet's leading virtual, full-service, bookstores, (http://www.booksnow.com) of Las Vegas, NV.

David Chazin, President and CEO of Books Now, Inc., has agreed to continue under a three-year employment contract.

C. Parker Garlitz, President and CEO of Galaxy Enterprises, Inc., said, "Acquisition of one of the leading Internet booksellers, like `Amazon.Com,' is only part of the ongoing Internet business expansion of Galaxy Enterprises, Inc." Galaxy Enterprises, Inc.

Galaxy Enterprises, Inc., also owns and operates Access Galaxy Mall (http://www.galaxymall.com), a leading commercial, electronic shopping malls on the World Wide Web, providing a commercial web presence for individuals and businesses on the Internet. The company also provides Internet education and essential marketing training.