Bertelsmann Acquires Digital Media Agency Smashing Ideas for Random House Inc.

(PRESS RELEASE) New York, May 5, 2011—Bertelsmann AG has acquired cutting-edge digital media agency Smashing Ideas, Inc. for its Random House, Inc. division, the world’s largest English-language trade book publisher. The purchase was announced today by Markus Dohle, Chairman and CEO of Random House and Member of the Executive Board of Bertelsmann AG, and Stephen Jackson, President and CEO of Smashing Ideas, Inc.

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.

The transaction closed on May 2. The terms of the acquisition are not being made public.

The fifteen-year-old Seattle-based Smashing Ideas is renowned for offering strategic marketing solutions and creating immersive, interactive content experiences, from games to branded sites to story-based applications, across multiple digital distribution channels, including online, smartphones, tablet devices, and iTV. They serve a roster of prominent clients such as Mattel, Nickelodeon, PBS, Cartoon Network, and Disney. Last year alone, Smashing Ideas generated 500 million game plays and half a billion page views for its clients. Smashing Ideas added an ePublishing unit last year, coinciding with the arrival of tablet devices in the marketplace.

Smashing Ideas will continue to operate independently out of their Seattle headquarters, as well as their U.K. office, primarily focusing on its current and future client businesses.

Last September, Random House, Inc. established a partnership with Smashing Ideas to develop first-rate mobile applications for selected titles. The first two apps, developed with the Random House Children’s Books division, Wild About Books and Pat the Bunny, both climbed to #1 in the books category in the Apple App store.

“Bertelsmann, Random House, and Smashing Ideas are a great fit creatively and culturally, as our recently begun partnership has demonstrated to us. We are driven to create value for authors, brands, and clients, and the opportunity to do so together, through broad-based digital development of innovative and interactive engagement with consumers and readers, is enormously appealing to us,” says Markus Dohle. “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.”