Indeed he is. In a major shift for the CEO and his company, Harcourt is heading for cyberspace not only to sell its brand-name books but also to promulgate a program it calls Lifelong Learning. In its most ambitious move, Harcourt is starting an Internet university and wants to become the first major publishing house to offer accredited college degree.

For now, Internet-related sales make up only $50 million, or about 2 per cent of the company's annual publishing and education revenue. But Mr. Smith estimates that three Web initiatives -- Harcourt University, an Internet high school for students wanting to take high-school equivalency exams, and the recently launched Harcourt.com Web site -- could each generate at least $100 million in annualsales within three to five years.

For Harcourt, these are risky ventures. The university plan has already angered college professors -- important constituents for a textbook publisher -- who worry that the Web will shortchange students because they won't have personal contact with professors and peers. Mark Smith, associate director of government relations at the American Association of University Professors, derides Internet universities as "prepackaged education" whose owners are more concerned with earning than learning. He says his 45,000-member group may oppose Harcourt's accreditation.

There is also the possibility that traditional distributors, such as college book-stores, might resent the online sales competition. Another hurdle: competition from many other companies and universities selling courses via the Web.

"We're entering terra incognita," concedes Mr. Smith, whose office is next to a movie theater in this Boston suburb. In outlining his plans, this man of many parts - entrepreneurialpublisher, thereater owner, department-store mogul - offers a rare look inside the publicly traded company he has run like a private family business.

In embracing the Internet, Mr. Smith acknowledges the challenges but likes the company's chances. He says Harcourt already has education experience through its big correspondence school and hightech training units - and it has a habit of remaking itself at opportune times.

The company has a long history of takeovers and sales. It is the largest shareholder of GC Cos., a Harcourt spinoff that operates the General Cinema theater chain, and it holds a 54 per cent stake in Neiman Marcus Group. Mr. Smith and members of his family have a stake in Harcourt General and GC that is valued at more than $800 million.

Now, to focus on its new ambitions -- and to boost its sluggish stock price -- Harcourt is spinning off to shareholders most of its stake in Neiman Marcus. After the spinoff, Harcourt expects to have $2.1 billion in sales and $105 million in earningsthis year. Mr. Smith sees the potential for eventual profit growth from the company's Internet operations in the realm of 25 per cent to 30 per cent; that's about twice the profit projections for its textbooks.

Harcourt started using the Internet in 1996, in its academic-press division, which publishes 175 journals, sold mostly to university libraries. Three years ago, Pieter Bolman, who heads the academic-press unit, figured he could bundle all 175 journals and sell them as a package to university systems over the Web. Harcourt offered that deal to 163 colleges and universities in the U.K. The universities got more journals -- the paper versions they were already buying, plus access to all the others online -- and Harcourt got 10 per cent more in subscription fees. Harcourt now has similar deals with 39 educational systems, including state colleges in Ohio, Georgia and California.

To establish its Internet university, Harcourt last year hired Robert Antonucci, the former Massachusetts educationcommissioner. In February 2000, if all goes as planned, Mr. Antonucci will apply for accreditation from the New England Association of Schools and Colleges, the same organisation that certifies Harvard University and other major colleges in the region.

Mr. Antonucci hopes to offer courses by September 200, attracting 5,000 to 10,000 students for a broad array of subjects in the arts and sciences. He has already hired several administrators and is recruiting deans. He will then look for a pool of 100 part-time professors to teach courses. Clicking computer mouses, students will attend virtual classes - some of them scheduled, others continuing chats on Web site bulletin boards. And students will have online access to textbooks - mostly Harcourt's, of course.

Mr. Antonucci expects tuition to be in line with the typical $1,200 a course at a state college in the U.S., but he doesn't see the school turning a profit until its fiscal year ending October 2003.

Harcourt's approach to Internet higher education issimilar to that of Apollo Group Inc., which operates the University of Phoenix, and of Jones International University, start-up Web school backed by cable-television entrepreneur Glenn Jones.

In March, Harcourt started a Web site where it eventually expects to offer some 2,000 products, including textbooks, journals and CD-ROMs -- plus education tips for parents and students. If a high school student comes home with disappointing SAT scores, says Ruben Preffer, president of Harcourt Online, a parent could look up free information about the test and what the scores mean, as well as get information on ordering test-prep materials from Harcourt.

Or a parent whose child is having trouble with fractions could get tips online, then get pitched a Harcourt textbook or workbook. Mr. Pfeffer says the growth of home schooling could create a prime market, with parents free to choose their own textbooks. Rather than alienate Harcourt's traditional distributors, he says, the company plans to avoid pricing that wouldundercut them.

Harcourt's biggest high-tech-related unit is its NETg subsidiary, which garners $100 million in revenue by training computer-systems operators and others in the field. The unit -- which already does some teaching over the Internet -- has 600 courses and 2,000 customers, including Microsoft Corp., Boeing Co. and Lockheed Martin Corp.

(The Asian Wall Street Journal)