Random House Buys Digital Agency With Mobile Focus

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Media firm Bertelsmann, owner of book publishing giant Random House, has purchased a digital agency specializing in putting books on devices like Apple's iPad. Bertelsmann acquired Smashing Ideas, a Seattle-based agency focused on developing entertainment content for digital devices.

About a year ago, Smashing Ideas, which also has an office in Newcastle, England, began working with Random House to develop iPad apps and e-books. Thus far, digital versions of two children's titles have resulted for "Pat The Bunny" and "Wild About Books."

"As a company, we're fairly focused on youth and family," said Stephen Jackson, president and CEO of 15-year-old Smashing Ideas. Now, he said, his firm is working on projects for young adults and adults with the new owners, and expects to work on projects targeting all demographics.

The digital agency has 70 employees and counts Disney, Mattel, Nickelodeon, Hasbro, GE, and Microsoft among its clients. Smashing Ideas will continue serving those clients, and will remain a standalone shop. "The beauty of it for us is [Bertelsmann] leaves all of their acquisition companies fairly independent. We will retain our independence as a standalone company," he said. Jackson added that no changes to staff, office locations or management are planned as a result of the deal.

When ClickZ News asked whether Jackson anticipates tie-ins between current clients and Bertelsmann properties, he said, "It makes total sense. It's something we would love to explore."

According to a press release, "The acquisition adds significantly to the set of Random House capabilities and further signals the intention of Random House and its parent company to be leaders in digital content creation, and demonstrates their commitment to expanding revenues from mobile and interactive online products and services."

Markus Dohle, chairman and CEO of Random House, added in the release, "We intend to provide our new Smashing Ideas colleagues with abundant resources to help them grow as a profit center, as well as a creative force."

Jackson said he intends to help the publisher determine the most appropriate platforms for distributing its titles. "The buzzword of the day is transmedia," he said. "I think we're really starting to see that come to fruition."

However, he continued, "The content has to be appropriate for that device. Should the content be equal and the exact same [on all devices]? My answer is no."

As for children's content, Jackson said the iPad is the clear winner. "Right now the device of choice in terms of enhanced e-books is the iPad.... It has demonstrated it is a really child-friendly device."

Terms of the deal were not disclosed.