Corporations: An Attraction of Opposites

With its National Broadcasting Co., its soaring business in color television, and its $560 million a year in defense and space sales, the Radio Corporation of America has long been the world’s No. 1 electronics company. Its imaginative and aggressive chairman. David Sarnoff, has ambitions for RCA to be much more than that. Having just emerged from six years of losses on its computers, RCA has twice this month raised its bid to grab more of the world wide computer market now dominated by International Business Machines. In its most costly move since entering the field in 1958, RCA brought out a new line of computers (called Spectra 70s) with integrated circuits that it claims are faster and cheaper to make than the transistor circuits that run most computers. Next, it signed a ten-year agree ment with West Germany’s giant electronics and computer company, Siemens & Halske, to swap patent licenses and technical data in a bid to compete with General Electric in Europe.

Last week Sarnoff arranged another alliance with potentially vast consequences. In what would be a $140 million stock swap, he offered to absorb Prentice-Hall Inc. of Englewood Cliffs, N.J., a leading publisher of textbooks and specialized business literature. Although Prentice-Hall’s 1963 sales of $68.4 million are dwarfed by RCA’s $1.78 billion gross revenues, the merger could result in revolutionary advances in communications and teaching methods by linking electronics with the printed word —for instance, computer-controlled printing at fantastic speeds delivered electrically to homes and offices.

Both firms seem to have just that sort of thing in mind. Highly diversified Prentice-Hall publishes books, loose-leaf reporting services, newsletters and training materials, and a subsidiary of fers residence and correspondence courses in brokerage and investment. The company is also developing audio visual devices and programmed materi als for teaching. Says Chairman (and cofounder) Richard Prentice Ettinger: “We’re going into an era of education involving more than books. We’ll put our knowledge together and beat every body.” Added Sarnoff: “I believe this will advance the art of communications as a whole.”

The merger (still subject to approval by both boards of directors and stock holders) was fostered by the handiest kind of broker: Prentice-Hall President Carroll V. Newsom, onetime (1956-61) president of New York University, who is a member of RCA’s board. After the merger, he will be joined on the board by Ettinger.