Business

Random House is hungry for RDA’s Allrecipes

Random House, the nation’s biggest book publisher and part of German media giant Bertelsmann, is the latest name to surface in the bidding war for Allrecipes.com.

The auction of the food site, which Reader’s Digest Association put up for sale in October, is nearing an end.

The addition of Random House has some insiders speculating that the final price could rise above $200 million, bringing in much-needed cash for RDA, which emerged from bankruptcy in 2010.

Random House publishes cookbooks by notables ranging from Julia Child and Rachael Ray to Giada De Laurentiis and Anne Burrell.

A Random House spokesman declined to comment on any interest or lack thereof in Allrecipes.

One source familiar with the process said, “The Random House play is that book publishers don’t have consumer-facing brands — they are basically distribution arms serving retailers.

“As their business becomes more digital, they are going to need consumer-facing brands.”

Random House earlier this month signed a pact to market its food titles directly to consumers through the Condé Nast food site Epicurious.com. Interestingly enough, Condé Nast Chairman Si Newhouse, Jr. is sitting out the auction for Allrecipes, after passing up a chance to make a preemptive bid.

RDA is pushing to pare debt and has been rapidly downsizing to focus on its core products. The moves follow a board coup that installed Robert Guth as the new CEO in September. He came after the ouster of five-month CEO Tom Williams, who succeeded four-year CEO Mary Berner.

RDA’s holdings include the flagship, Reader’s Digest, which had a surprising 17.9 percent increase in ad pages in 2011; Family Handyman, which also had a 9.6 percent rise for the year, and Taste of Home, one of the largest circulation food titles.

Gone is the money-losing Everyday with Rachael Ray, which was sold to Meredith Corp.

Meredith is also said to be vying for Allrecipes. The mag publisher, which is helmed by Better Homes & Gardens, has been trying to beef up its offerings in the food area.

In fact, when Berner was still RDA CEO, Iowa-based Meredith made an unsolicited bid for Allrecipes. Meredith was rebuffed at the time because RDA wasn’t ready to relinquish the No. 1 food Web site, which claims more than 16 million unique visitors a month.

Instead, Meredith started a rival site, Recipes.com, and in July introduced a complementary magazine of the same name alongside its Eating Well magazine and the Rachael Ray title.

Adding to the drama, Scripps Interactive, owner of the Food Network, which is the No. 2 foodie site behind Allrecipes, is also in the hunt.

It publishes, in a joint venture with Hearst, Food Network Magazine, which saw its ad pages rise 9.5% to 880.15, according to revised numbers from Media Industry Newsletter.

Food Network Magazine still has a comfortable lead over rival Everyday with Rachael Ray, which is expected to post losses of $10 million for the year after ad pages tumbled 21.2 percent to 585 pages.

The final player is Jeff Bezos’ Amazon. The e-commerce giant crowed that the holiday season was the best ever for its new tablet as well as its e-readers, with sales for the bunch coming in at over 1 million per week in December.

Amazon is keenly interested in keeping consumer interest high as its $199 Kindle Fire — the tablet that went on sale Nov. 15 — tries to close the gap on the enormously popular Apple iPad.

There is still a dark horse in the race for Allrecipes — AOL — but one source said it does not look like a final bidder. “I would not rule AOL out entirely, but they’d have to come with a big number,” said the source.

Kushner offer

Memo to Macy’s: Keep space clear in front of your windows for a hat-eating publishing executive.

Jared Kushner, CEO of the Observer Media Group, was livid that an unnamed rival would question whether the expanding media empire built around the salmon-colored weekly was going to turn a profit this year.

In Wednesday’s Media Ink, Kushner, through his president, Christopher Barnes, predicted that the company would indeed make a small profit this year — its first since he took over from Arthur Carter in 2006. Revenues are believed to be just over $10 million, up from $5.5 million when Kushner took over.

Media Ink quoted an unnamed exec as saying that if Kushner made a profit in 2011, he’d “eat his hat in front of Macy’s window.”

Kushner said that if the rival exec would come forward, identify himself and be willing to sign a non-disclosure agreement, Kushner would let him examine the Observer’s books.

Media Ink relayed the offer to the skeptical executive, but he declined to take advantage of Kushner’s offer.

We also offered to be a stand-in for the executive and have a look at the Observer’s financials, but Kushner turned down our offer.