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Random House Forms Venture Capital Fund
Jim Milliot -- 4/3/00

Random House Inc. has formed a wholly owned subsidiary, Random House Ventures LLC, that will make investments in start-up and technology companies that complement Random's core book publishing operations. Richard Sarnoff, executive v-p and chief financial officer of Random, has been named to the additional position of president of RH Ventures and will report to Erik Engstrom, Random president and chief operating officer, who will be the fund's chairman. Random has committed "multimillions of dollars" to the enterprise, according to a spokesperson.

RH Ventures will provide access to pools of capital, as well as strategic relationships, for pre-IPO companies or spinoffs with the potential to be market leaders. Sarnoff said Random decided to form the venture group because "we have been party to numerous business plans with companies who want our content or some service connected to publishing." Sarnoff told PW RH Ventures will invest in various businesses "that revolve around book publishing," such as companies in new channels of distribution or developing new reading technologies. The fund will not invest in any content companies, and any acquisitions involving a traditional book publisher will be made through Random House Inc. "We've looked seriously at a number of companies and are prepared to commit some capital," Sarnoff said.

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