Last week Penguin Group took over Authors Solutions, one of the biggest print-on-demand publishers, with imprints iUniverse and AuthorHouse. This is the first time a traditional book company (now increasing referred to as a legacy publisher) has purchased a self-publishing company.

According to an article on Friday, July 20, 2012, in The Wall Street Journal, the deal is worth $116 million and the self-publishing company will be folded into Penguin and operate as a separate unit. The article quotes Mike Shatzkin, chief executive of Idea Logical Co. a New York-based publishing consultancy, as saying this “constitutes tacit recognition that the legacy publishing model is severely challenged and may not work sometimes in the foreseeable future.”

The article in WSJ goes onto point out that publishing houses once had limited access to their customers’ buying and reading habits. But e-book sales have created a trove of data that-if harvested well-can show publishers how, why and what people are reading. “Authors Solutions is particularly adept at data analytics,” says John Makinson, chief executive of Penguin, “That information if invaluable to publishing houses whose livelihood is determined by staying, ‘on trend.’”