Amazon Buys Goodreads, but Is It a Good Deal?

goodreads Amazon announced today that they’re buying Goodreads, a social book site that lets you review books you’ve read, and look for recommendations based on your reading list and the books your friends are reading. Needless to say, this is a slam dunk match for Amazon and Goodreads, as they really can complement each other nicely. There are a lot of reasons why this is good for everyone (Amazon, the Goodreads team, Goodreads users and Amazon Kindle users), but it does strike me that Goodreads being off the market is a potential loss for a few other big ebook players…let’s look a little deeper at why this works for Amazon and a few “alternate realities” of who else could have proposed to Goodreads.

First, if you’re a Kindle user this is a very good thing. Goodreads will no doubt get excellent Kindle integration; it’s actually one of the big reasons listed on the Goodreads blog for the deal. I have no doubt that soon, your Kindle will tell you what your friends are reading and alert you to similar books you might like based on your Goodreads shelf. Further, Goodreads has a huge book club following; imagine if Kindles supported “virtual book clubs” with Goodreads as the backbone of shared comments, reviews, and discussions, all accessible on your Kindle as you read a book. There are a million ways Goodreads fits incredibly well in an eBook world, and Amazon certainly has the vast user base to leverage every last bit of it. Not to mention, for those who aren’t eBook fans, there’s plenty of opportunity with an Amazon partnership to push paper books as well.

There’s another side to this for Amazon as well. They’ve run into issues with their publishing arm not being welcome in physical bookstores, and some stores have refused to carry paper versions of titles that are exclusive to Amazon in eBook form. Publishers, in general, have been somewhere between wary and downright cold to Amazon, and this shifts the balance of power immensely. According to the press release sent out by Amazon, Goodreads has 16 million users marking 4 books per second as “to be read”. In other words, Amazon is buying a social network of highly engaged, highly active, voracious readers. All of them may not buy through Amazon, but that’s ok. Amazon has access to a vast army of people who love to read, meaning that they’re primed to seek out any and all opportunities to read a good book. Even if rival bookstores and publishers are going out of their way to avoid even breathing near anything Amazon-exclusive, it doesn’t matter, because Amazon can bypass all of them and still reach readers. Simultaneously, all those publishers who dislike Amazon now have one more reason to stay on their good side, to gain access to Goodreads and be invited to provide author chats, exclusive content, and other marketing offerings. Goodreads offers up exactly the customer every publisher and bookstore dreams about, and now Amazon is the gatekeeper.

Let’s play what-if for a second here…given how potentially seismic this is for the book world, what would it be like if someone else had snapped up Goodreads? Who is potentially missing out? Barnes and Noble comes to mind at once, since they desperately need something, anything, to snap them out of their downward spiral. They would also have been a good fit for many of the same reasons as Amazon, and while I don’t think Goodreads alone could change their fortunes, they could use any and all help, and 16 million engaged users would definitely count. Apple falls into a similar category, as they need something to remind people iBooks exists. Apple wouldn’t have been as great of a fit to the Goodreads community, but they, too, could have used the opportunity to showcase themselves to the people who are buying books.

Finally, I think one other company would have been an intriguing partner-Facebook. Goodreads has a tiny fraction of Facebook’s users, but Amazon has a lot of customers. And Goodreads will be a big help in bringing more social DNA to Amazon. The more Goodreads builds themselves up with Amazon’s deep pockets, the more they engage users, the more Amazon learns about how to socially engage and sell to users. Facebook would have been an interesting fit, and they might have been able to understand better how social networking influences purchasing…data they could have used to build up their business.

Not everyone is going to be happy that Amazon bought Goodreads; there are plenty of readers who refuse to shop there. At the same time, it’s not at all shocking that Goodreads and their 16 million customers were an acquisition target, and even looking at the “What-if” companies doesn’t yield anyone who would make 100% of the users happy. Amazon is, as I said above, a great fit for Goodreads, and given their commitment to the ebook world, I think this bodes well for Goodreads and their users!

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About the Author

Zek has been a gadget fiend for a long time, going back to their first PDA (a Palm M100). They quickly went from researching what PDA to buy to following tech news closely and keeping up with the latest and greatest stuff. They love writing about ebooks because they combine their two favorite activities; reading anything and everything, and talking about fun new tech toys. What could be better?

4 Comments on "Amazon Buys Goodreads, but Is It a Good Deal?"

  1. Doug Miller | March 29, 2013 at 9:55 am |

    It is kind of weird that Amazon felt the need to acquire Goodreads after buying the very similar Shelfari a few years ago.

    There is still LibraryThing for people who want to stay away from Amazon. I did read somebody complaining about the fact that they gave a lot of great information about their reading habits to Goodreads as a private company, but now feel differently that Amazon has it all. That seems like an overreaction to me, but I guess I understand it.

    The fact is that I have accounts in all of those places that I mentioned above, all set up to help me record – for myself – what I was reading and when, but I lost interest in all of the because it was too much of a bother to keep updated.

    • I think Goodreads has a stronger recommendation engine, plus all those users.

      I always laugh a little at people being more trusting of a private company than a large one like Amazon. It’s not that you should trust large corporations over the little guy, but this automatic “amazon=evil” reaction always strikes me as a bit overblown…especially when people are expressing their anger on places like Facebook and Twitter, and using gmail constantly. Amazon is not the only company sucking down your data for their own purposes. —
      Sent from my thumbs.

  2. Whoa…Businessweek guesstimates that Amazon paid 1 BILLION for Goodreads, give or take a few million.

    While this is rampant speculation, their logic actually makes sense. They look at how much other social networks are valued per user, and then did the math from there. Whether or not it’s accurate, this does answer why Amazon bought them and not anyone else-no one else could afford them!

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