McGraw-Hill Companies

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MCGRAW-HILL COMPANIES

The McGraw-Hill Companies encompass educational, financial, business, governmental, and professional publishing and information services. In the late 1990s it was the world's largest educational publisher and its overall revenues were more than three billion dollars annually.

John A. Hill and James H. McGraw were nineteenth century publishers of magazines which served industry and reported on technological progress. As the United States changed from an agrarian to an industrial society, there arose a growing market of technicians interested in the practical application of science to various facets of daily life. In 1909 the heads of the book departments at Hill Publishing Company and McGraw Publishing Company agreed to a merger of the two book departments. A coin toss decided the name of the new company, The McGraw-Hill Book Company, and the new president, John A. Hill. The company was housed in McGraw Publishing's building in New York City.

Although the magazine publishing operations of the two companies remained separate for a while, in 1917 a more complete merger of the McGraw and Hill interests took place when John A. Hill died at age 57. The McGraw-Hill Publishing Company was established as the world's biggest technical publisher, and the book company became its subsidiary.

World War I (1914–1918) brought an increased demand for technical publications, especially engineering books in radio communication, aviation, and other areas directly related to the war effort. In one instance McGraw-Hill supplied 150,000 technical books to the U.S. Army for shipment to France in a matter of days.

McGraw-Hill expanded rapidly during the 1920s, forming a college department in 1927 and entering the field of business books and magazines with the purchase of the A.W. Shaw Company of Chicago in 1928. One of Shaw's monthlies, the Magazine of Business, was turned into a weekly that eventually became Business Week, one of McGraw-Hill's best-known publications.

In 1930, despite the stock market crash of 1929 and the ensuing Great Depression (1929–1939), Mc-Graw-Hill established four new magazines. That year the company also opened a West Coast office and entered trade book publishing with a new imprint, Whittlesey House, named after James McGraw's father-in-law. A new office building in New York was commissioned and first occupied in 1931. By 1933, however, the company was forced to make deep cuts in personnel and salaries and it had to sell off its printing machinery. The company recovered later in the decade with the help of bestsellers from Whittlesey House, business books, and the establishment of a vocationaleducation department in 1930. James McGraw, Jr., became president and chairman, and by 1937 profits were more than one million dollars.

During World War II (1939–1945) McGraw-Hill's paper needs received special priority because its technical publications were important to the war effort. Especially important were its special training manuals used in the accelerated training of the men and women joining the armed forces. Many dealt with radio and electronics and continued to be successful after the war. The company also increased its international activities, opening a book-export department and a foreign language-translation office. In 1944 McGraw-Hill acquired the Embassy Book Company Ltd. of Toronto, later renaming it the McGraw-Hill Company of Canada, Ltd. and then McGraw Ryerson. The World News Service was begun in 1945.

After the war Curtis G. Benjamin became president of McGraw-Hill's book company and developed the text-film department, which provided audiovisual materials for educational institutions. The company also published several large multi-volume series in such fields as aviation and radar that grew out of government-financed projects. Another major project begun in the late 1940s was the publication of eighteenth century Scottish author James Boswell's manuscripts, with the first of a projected 40 volumes appearing in 1950. In 1950 the company achieved a major commercial success with Betty Crocker's Picture Cook Book.

Building on these successes, McGraw-Hill established several new divisions and added others through acquisitions in the late 1940s and early 1950s. In 1949 it purchased Gregg Publishing Company, which became the business-education department. In 1950 a technical writing division was created to produce specialized materials for government and industry. A medical publishing department was established in 1945, but it was not until McGraw-Hill acquired medical publisher Blakiston Company from Doubleday in 1954 that it would capture a major share of the medical market. The international division, established in 1946, contributed greatly to the company's growth in the 1950s, with book exports trebling and profits coming in from the international sale of text-films, filmstrips, and foreign language rights.

The McGraw family continued to run the company in the 1950s, with John McGraw, Jr.'s brother, Curtis, succeeding him as president. When Curtis died unexpectedly in 1953, another brother, Donald C. McGraw, became president. During the decade McGraw-Hill acquired several companies from Warren C. Platt and began three major encyclopedia projects: The McGraw-Hill Encyclopedia of Science and Technology, the Encyclopedia of World Art, and the New Catholic Encyclopedia. By 1959 revenues exceeded $100 million.

Between 1960 and 1965 overall sales of the book company doubled, contributing 39 percent of the parent company's overall revenue. In 1961 McGraw-Hill acquired the F.W. Dodge Corporation, an information provider to the construction industry. The general book division was created in 1962 by merging the company's industrial, business, and trade book divisions, and in 1963 the book company entered the school textbook market by acquiring Webster Publishing Company.

A major reorganization took place in 1964, when the book company and the F.W. Dodge Corporation merged with the parent company to form McGraw-Hill, Inc. Now there would be a single parent company with three operating divisions: book publishing, magazines and news services, and the Dodge group of construction industry information services. Following the reorganization, McGraw-Hill made several acquisitions, including the California Test Bureau (educational publishing), Shepard's Citations, Inc. (legal publishing), and Standard and Poor's Corporation (financial information services). Internationally the company expanded into Mexico in 1967 and into Japan in 1969.

During the 1970s McGraw-Hill was headed by Shelton Fisher, president and CEO, who had succeeded Donald McGraw in 1968. His goal was to transform McGraw-Hill into a dynamic media giant. He expanded the company internationally into Canada, Brazil, and India; he also bought television stations from Time Inc. and moved the company into a new world headquarters in New York in 1972. Later in the decade he became chairman of the parent company, with Harold McGraw, Jr., becoming president. When Fisher retired in 1974, Harold McGraw, Jr., became chairman in addition to his other positions.

At the end of the 1970s McGraw-Hill was a healthy, well-managed conglomerate. Its several operating divisions included book and publications companies, information systems, Standard and Poor's Corporation, and the McGraw-Hill Broadcasting Company. Overall revenues in 1978 exceeded $761 million. In 1979 American Express attempted a hostile takeover, offering $830 million for the company's stock. Concerned about the integrity of its editorial independence, McGraw-Hill successfully defended itself even when American Express increased the offer to nearly one billion dollars.

The company attempted to strengthen its management by appointing Joseph L. Dionne to the newly created position of vice president of operations. When Harold McGraw, Jr., retired in 1983 as president and CEO, Dionne succeeded him. Harold McGraw, Jr., remained as chairman until 1988. Meanwhile, another generation of McGraws was being groomed to run the company.

During the 1980s McGraw-Hill entered the electronic information marketplace, making available in computerized form much of the information supplied by the company's news service, magazines, Standard and Poor's, Dodge, Platt, and Shepard's. The company entered computer publishing by acquiring three computer magazines, Byte, Unixworld, and LAN Times, and purchasing Osborne Books.

The company also underwent a change in focus under Fisher's direction, switching from a media-based organizational structure to a market-oriented structure consisting of 14 market-focused operating groups. McGraw-Hill acquired Random House's college division for more than $200 million in 1988. Then in 1989 it entered into a joint venture with Macmillan, creating the Macmillan/McGraw-Hill School Publishing Company that combined the elementary, secondary, and vocational education businesses of both companies. McGraw-Hill would buy out Macmillan's interest in the joint venture in 1993. At the end of the 1980s McGraw-Hill's overall revenues were approaching two billion dollars annually.

In 1990 the company introduced the first customized publishing system that allowed professors to design their own textbooks. Later in the decade this electronic textbook publishing system was acknowledged as the leading U.S. custom book publisher with 18.5 percent of the market. By 1993 the company was taking in almost $2.8 billion in revenue, with its Educational/Professional unit accounting for 42 percent and the Financial Services unit accounting for another 48 percent of the company's net income. The company's third unit was Information and Media Services.

McGraw-Hill unveiled a new corporate identity program in 1995 changing its name to The McGraw Hill Companies, Inc. The slogan of the campaign announcing their name change was, "Keeping the world up to speed." It was a remarkable year for the company. Its stock price hit a record high; Business Week' s circulation surpassed the one million mark; the company's Web site was launched; and numerous new products and ventures were announced. Revenues topped $2.9 billion and net income rose nearly 12 percent to $227.1 million.

After leading the company for 15 years, Joseph Dionne retired in 1998 as president and CEO; however, he remained as chairman. He was succeeded by Harold (Terry) McGraw III, son of Chairman Emeritus Harold McGraw, Jr. With the company's leadership back in the McGraw family and with more than a century of history, McGraw-Hill could well claim to be one of the premier publishers in the world.

See also: Publishing Industry