In the fall of 1996, Pearson PLC was a struggling company with some great assets but little focus. Its stock had been pounded by City of London investors impatient with Pearson's frequent earnings surprises and grab bag of holdings. Looking for a break from the past, the board offered the top job to Marjorie Scardino, a little-known American who was then running the Economist Group, which is 50% owned but not managed by Pearson. Although concerned about the glare of publicity that comes from running a big media company, she accepted the challenge.
It has been a good move for her and for Pearson. Scardino, 53, has presided over a remarkable turnaround: She has shed such superfluous assets as Tussaud's and Pearson's stake in the Lazard investment banks. At the same time, she has built on the company's strengths in financial information and newspapers. She has invested in the Financial Times in the U.S., started a German edition with Bertelsmann, and solidified Pearson's control of Spain's Recoletos newspaper group.
Her maneuvering has made Pearson a strong global contender in financial news, on a par with Dow Jones & Co. Pearson has also become a major player in educational publishing, thanks to its purchase of Simon & Schuster's educational publishing business from Viacom in May 1998 for $4.6 billion--one of Scardino's biggest moves.
That doesn't mean Scardino is ignoring new media. The Financial Times recently rolled out a new Web site, FT.com, and Pearson has invested in various new media ventures, many of them in California. Scardino recently agreed to combine Pearson Television, which produces The Price Is Right and the popular serial Baywatch, with the broadcasting interests of Bertelsmann and Belgium's Albert Frere. The venture would be Europe's largest broadcasting operation, with $3.6 billion in revenues.
Although Scardino still has a trace of Texarkana in her voice, she has adapted well to her adopted European home. She once said that when she first walked into a British boardroom, she felt like a "Dallas Cowboys cheerleader." But now she's a big hit in the City. Since she took over in late 1996, Pearson's stock price is up 136%. Sales have risen 175% to $4.85 billion and profits have more than doubled to $864 million over the same period. The big challenge now will be keeping up the pace.