NetLibarary pulls its IPO:
thestandard.com
December 12, 2000, 3:21 PM PST
NetLibrary Puts IPO Back on the Shelf
The offering could have given the fledgling e-book business some credibility. The
pullback just shows that the industry is struggling like any other.
By Jennifer Greenstein
E-book company NetLibrary, which
announced a few months ago that it
intended to raise $82 million with an IPO,
said Tuesday that it has now abandoned
those plans.
"Given the current market conditions, we
have put [the IPO] on hold," says Brian
Bell, a company spokesman. "There really
isn't any sort of connection between the
business itself and the decision not to do
the IPO right now. The decision is based
strictly on markets."
NetLibrary would have been one of the first
major e-book companies to go public.
When it filed the paperwork in August for
an initial public offering, the move was
regarded as a sign that the fledgling
e-book industry was gaining credibility as a
serious business; but these days the
market for IPOs in virtually every industry
looks bleak. Likewise, the exuberance
surrounding e-books has cooled, especially
since Stephen King put his high-profile
experiment in Web publishing on hold last
month.
Some analysts say NetLibrary has taken a
smart approach by focusing on educational
uses of e-books rather than trying to sell
to consumers, who so far have been less
than wowed by the prospect of giving up
paper books for the chance to read for
pleasure on a computer screen. Last
month, NetLibrary announced an
agreement with Houghton Mifflin (HTN) ,
one of its investors, to create electronic
versions of the publisher's college
textbooks.
"We think the real advantage of digitizing
books comes from textbooks and print on
demand," says Daniel O'Brien, a senior
analyst with Forrester Research (FORR) .
"NetLibrary is in better shape than others
that are betting everything on mass
consumer adoption of e-books. It's a more
measured strategy."
That strategy, however, is not one that
the public markets seem likely to embrace
in the near future.
NetLibrary, which digitizes books and sells
them primarily to libraries, has raised $115
million in four rounds of private financing. "NetLibrary has enough
cash to operate for at least a year, and we are considering
alternative sources of funding," Bell says. The company had
third-quarter revenues of $4.5 million. |
