Amazon.com to Acquire Goodreads

[kyteflyer]

Originally Posted by CWatkinsNash

While I'm in agreement that they don't want any competition, I don't see how it applies here. Goodreads doesn't sell books. They provide a feature that allows users to search their favorite places (not just stores, but also libraries and archives) for books, but it's not a primary feature of the site. (It's an awkward feature anyway, which can be tricky to use, so I can't be the only one who often finds it easier to just open up a new tab and search for the book myself.)

The only way Goodreads will disappear is if Goodreads / Amazon pulls some sort of boneheaded move that causes everyone to leave. I'm not ruling that out, mind you; as I stated previously, I'm taking a wait and see approach. But I don't believe Amazon bought it to kill it like they've done with others. They now have access to the data of 13 million readers - I don't see them tossing that in the trash on purpose.

It competes with Shelfari. What I would expect is an eventual migration of everyone over to Shelfari. And no, they arent going to trash the data, they will mine it for all its worth (before anything changes). And that is worth quite a lot, I imagine.

[jersysman]

Originally Posted by kyteflyer

It competes with Shelfari. What I would expect is an eventual migration of everyone over to Shelfari. And no, they arent going to trash the data, they will mine it for all its worth (before anything changes). And that is worth quite a lot, I imagine.

Since I think Goodreads is in a lot better shape than Shelfari and has more membership, I would think that Amazon, if they do, would migrate Shelfari users over to Goodreads. Unless they do decide to keep both.

[porkupan]

I am not sure if I may be considered a real Amazon hater, as I am often a customer of theirs. But I admit that given a decent choice I prefer to buy elsewhere.

Cannot see how Goodreads acquisition is anything but an anti-competitive move by Amazon.com. What were they looking for when considering whether to buy Goodreads? A better book review database? Well, i doubt it. Theirs is already the biggest, having been accumulated over almost 20 years of dominant Internet's presence. I believe, despite all usual claims to the contrary, Amazon will (1) direct the Goodreads members to Amazon for purchases and (2) cut off the competition from access to Goodreads user content database.

My understanding of Goodreads business model is that it was a social network of book-lovers/readers, and in that respect parallel but very similar to Amazon's own product review system. Yes, it has some cataloging capabilities, i.e. "To Read" lists, progress meters, etc. They are also parallel to Amazon's own existing capabilities, and don't constitute any particular know-how worth millions of dollars anyway. What made Goodreads different was that as an independent online entity, it had not been actively driving members to make purchases at a particular vendor (Amazon?), but rather offered a choice of competitive purchase links. Also, it could license access to the user-generated content (reviews) to anyone willing to pay: Google Books, Google Shopping, Kobo, Sony, Apple, etc. I don't know how many vendors could afford to incorporate Goodreads reviews into their bookstores, but I believe some did. In my opinion, product review databases are the holy grail of Internet shopping, and he who owns the biggest and the best, owns the customers.

What business sense does it make for Amazon to continue the current Goodreads business policies? About as much as it made for Borders to outsource its online operations to Amazon when it did it at the end of 90's. Only Amazon is not run by delusional fools, while Borders was. So, my personal hunch is that Amazon is buying Goodreads to either kill it, or to use it like IMDB to generate business. Pretty good for Goodreads backers and stockholders, bad for its members and very bad for general public. Amazon being a one-stop shop for everything is OK with me. Amazon being the only game in town - not so much.

[fjtorres]

Originally Posted by porkupan

What business sense does it make for Amazon to continue these policies?

The same business sense that keeps Zappos independent and "competing" with Amazon.com: Appealing to people who aren't comfortably served by the mainstream Kindle services. (And the same business sense why car makers keep multiple brands focused on different customer bases. Think Toyota and SCION, for example.)

There is also the reality that if an independent Goodreads can (ever) generate revenue from non-Amazon customers as a competitor those revenues will go to Amazon coffers and not to B&N or Random Penguin or Author Solutions.

Plus, there is more to modern retail than just marketting--convincing people to buy what you have for sale. There is also the flip-side: market research, finding out what consumers want that you are not already offering. As an independent operation, GR has access to stats and reviews from non-Kindle customers which can be useful for figuring out how those folks think and what they want. That would be pretty valuable market research right there.

Me, I'm of the opinion that Amazon bought Goodreads primarily to keep its enemies from buying it. It was in play and somebody was going to buy it; better them than an enemy. Having achieved that, they don't need to do much else. Like a gambler on a streak, their best bet may be to just let it ride and see how far it goes...

No need to be any more Machiavellian that that.

[porkupan]

Originally Posted by fjtorres

I'm of the opinion that Amazon bought Goodreads primarily to keep its enemies from buying it. It was in play and somebody was going to buy it; better them than an enemy. Having achieved that, they don't need to do much else. Like a gambler on a streak, their best bet may be to just let it ride and see how far it goes...

Well, OK, it is possible that that's all there is to it. Amazon.com had a few hundred mil, saw a target, no real need but could be useful for a competitor, bought it. Now all Goodreads needs to do (continue doing) is to make money for Amazon while not impeding its main business. Kinda like Zappos. But the things is, it is not at all like Zappos. It is not a store, and as a business model it may not be commercially viable at all. For most its prior life Goodreads needed financing and a major volunteer workforce to help it float. And its very purpose was not to broaden Amazon's market, but to serve its community by providing information and comparison.

I think Goodreads is more like Stanza or Mobipocket. Not really a business, more like a service, which is great only while it's free. And once you are paying for it, it is no longer so great. Can be a money pit if you let it be.

Let's give it a year or so, and see where Goodreads is then. I think it will either be integrated into Amazon completely and thus dismantled, or it will be left "alone" (like IMDB) as a feeder service for book sales (only to Amazon), or possibly totally dismantled and done. Its user-generated content database will most probably be pillaged by Amazon, at which point Goodreads will not continue standing on its own as an online destination. Or it may be remade into an ebook store (integrated with Kindle store into this new entity, possibly selling content in both Kindle and EPUB formats). I don't believe in the charitable nature of any business, especially Amazon. There.

Imagine this happening to Wikipedia. Being sold to Britannica, or Random Penguin, or Amazon, or Google... And then not exactly dismantled, but forced to make money, as that's all any business is interested in after all. If not today, tomorrow or the day after. I've seen it happen many times, and I have no reason to believe this time is different.

Sooner or later it is going to happen to Wikipedia.

[kyteflyer]

Originally Posted by jersysman

Since I think Goodreads is in a lot better shape than Shelfari and has more membership, I would think that Amazon, if they do, would migrate Shelfari users over to Goodreads. Unless they do decide to keep both.

That would be the most sensible option. However, after seeing how they have killed/crippled Stanza, and kept the Kindle app, instead of incorporating the best of Stanza into Kindle, or making Kindle books available in Stanza... I'm not that confident that good sense will prevail. ONly time will tell

[fjtorres]

Originally Posted by porkupan

Well, OK, it is possible that that's all there is to it. Amazon.com had a few hundred mil, saw a target, no real need but could be useful for a competitor, bought it. Now all Goodreads needs to do (continue doing) is to make money for Amazon while not impeding its main business.

Uh-huh.
As opposed to making money for their venture capital investors.
Goodreads has always been intended to be a money-making venture. The fact that they found investors suggests they had a plan to generate income and the fact the investors sold out (at a hefty profit) suggests there is *some* income coming in, with prospects for more. But prospects are not reality.

If Amazon doesn't see the business case work out, they might indeed dismantle Goodreads in a year or two.
If Amazon had not bought Goodreads and the business case didn't work out, they *also* would have been dismantled. And probably sooner than under Amazon.
Only difference I see is Amazon is generally more patient with their properties than other players. As Bezos said, they're not afraid of a bit of red ink.

With Sugar Daddy Amazon Goodreads might get a lot more time to prove their business case than they would with another buyer.
Assuming another buyer could even be found.

In some other alternate universe where Amazon didn't pick up Goodreads, they might be announcing the dismantling right now...

As for Wikipedia: if they ever do cash in, I suspect the likeliest candidate would be Yahoo.

[fjtorres]

Originally Posted by kyteflyer

That would be the most sensible option. However, after seeing how they have killed/crippled Stanza, and kept the Kindle app, instead of incorporating the best of Stanza into Kindle, or making Kindle books available in Stanza... I'm not that confident that good sense will prevail. ONly time will tell

Do consider that some times conglomerates buy companies as a way to hire people.
(Microsoft does it a lot--they buy a company not so much for the product but for the IP, their resources, their staff, and especially the execs and techies.)

The big question about Stanza is: what about the people? Were they dumped on the street? Or are they spending their time twiddling their thumbs in their cubicles? Are they in charge of the iOS kindle app or other projects? Stanza itself is more than a piece of software; behind it there are algorithms, coding expertise, iOS expertise... Lots of value in that operation beyond an ebook reader app and Amazon has shown themselves to be extremely clever in finding value where others see none.

Things are never cut-n-dry in the big leagues.

[kyteflyer]

Originally Posted by fjtorres

Do consider that some times conglomerates buy companies as a way to hire people.
(Microsoft does it a lot--they buy a company not so much for the product but for the IP, their resources, their staff, and especially the execs and techies.)

The big question about Stanza is: what about the people? Were they dumped on the street? Or are they spending their time twiddling their thumbs in their cubicles? Are they in charge of the iOS kindle app or other projects? Stanza itself is more than a piece of software; behind it there are algorithms, coding expertise, iOS expertise... Lots of value in that operation beyond an ebook reader app and Amazon has shown themselves to be extremely clever in finding value where others see none.

Things are never cut-n-dry in the big leagues.

The Stanza people were kept on for a very short time, and then they were dumped on the street. I heard they were never actually given anything to do. Amazon didnt just buy stanza, it bought Lexcycle which had a decent database of OPDS catalogues which Stanza accessed. Some months after the people disappeared, so did the database, and then a month or two after that when the domain came up for renewal.. well.. it just didnt. Site dead, catalog info dead, Stanza people out looking for new jobs. One fell on his feet. I have no idea about the rest. Of course with software purchase being what it is, those guys can never replicate Stanza in any form. Amazon updated Stanza just once, so those of us who had updated from iOS 4.3.5 could still use it (but only after hassling them long and hard) and what they gave us was crippled at best. Since then, every IOS update seems to make it less and less usable.

Before this, though, when we were trying to get them to do something so we could still keep using it, they (the CSRs) completely denied it was anything to do with Amazon. Clearly, the powers that were had no intention of continuing support, and had not even bothered telling the customer service people that anything other than a Kindle app existed.

Things may not be cut and dried in the big leagues, but in this case, they were.

[DianNC]

Did Amazon also buy Woot? I got an email from Amazon this morning advertising a deal on the Samsung Galaxy Note tablet which stated I could purchase it through Woot. Then, at the end of the email, I was informed that I could now sign into Woot using my Amazon account.

This could be old news. I'm generally out of the loop when it comes to the wheeling and dealing of the corporate world.

[porkupan]

Originally Posted by fjtorres

Goodreads has always been intended to be a money-making venture. The fact that they found investors suggests they had a plan to generate income and the fact the investors sold out (at a hefty profit) suggests there is *some* income coming in, with prospects for more. But prospects are not reality.

Well, that's the way of the world, isn't it? The members assumed they were part of a community, but ended up being the product. It seems there is some controversy about whether Goodreads was actually making or losing money, but it may be besides the point. There must have been pressure to cash out coming from the backers, and the serous profits were probably nowhere to be seen. Otherwise there would have been other suitors, or an IPO. For Amazon this seems more like a synergy buy, kinda like Facebook/Instagram.

Originally Posted by fjtorres

In some other alternate universe where Amazon didn't pick up Goodreads, they might be announcing the dismantling right now...

Or not. There might have been other ways to unwind. The problem I have is that a dominant ebook and device seller is buying an "independent" book review site. It's a bit like the New York Times selling into one of its investigative reporting subjects. To prop it up. You see the point I am trying to make? Google, Yahoo, IBM, Microsoft - I would have been OK with those.

For Amazon books and ebooks may not be the primary business any more. They now sell and resell everything to everyone. An online "walmart", "nordstrom" and "ebay" - all in one. However, there is only one thing they actually make - Kindle. And not being afraid of "a bit of red ink" can mean only one thing: their long-term plan is to keep underselling everyone, until they are the only one left. Borders down, Amazon takes its business. Who is next? B&N. Will be done in a couple of years. I think to start really making money in books and ebooks Amazon needs to kill the remaining bookselling competition off. Goodreads acquisition may be part of this strategy.

Originally Posted by fjtorres

As for Wikipedia: if they ever do cash in, I suspect the likeliest candidate would be Yahoo.

I hope it's anyone but Yahoo. Yahoo would take a month before filling Wikipedia up with ads and popups, and another half a year before the traffic starts falling off the cliff...

[hwlester]

Originally Posted by DianNC

Did Amazon also buy Woot? I got an email from Amazon this morning advertising a deal on the Samsung Galaxy Note tablet which stated I could purchase it through Woot. Then, at the end of the email, I was informed that I could now sign into Woot using my Amazon account.

This could be old news. I'm generally out of the loop when it comes to the wheeling and dealing of the corporate world.

Yes, Amazon picked up Woot a while back (two years ago?).

[fjtorres]

Originally Posted by porkupan

The problem I have is that a dominant ebook and device seller is buying an "independent" book review site. It's a bit like the New York Times selling into one of its investigative reporting subjects. To prop it up. You see the point I am trying to make? Google, Yahoo, IBM, Microsoft - I would have been OK with those.
.
.
I hope it's anyone but Yahoo. Yahoo would take a month before filling Wikipedia up with ads and popups, and another half a year before the traffic starts falling off the cliff...

None of those seems to have had any interest.
(And don't forget Google is as much an ebook retailer as Amazon. Not as successful but just as interested in pushing their product to all comers. Maybe more precisely because they're not as successful.)
The best non-Amazon fit I could think of myself would've been Facebook but they're more interested in reskinning Android into Windows Phone than hosting literary communities. Because they too are looking to monetize their "membership".

As you said, that's the way of the world. For now.
Change is constant, though.

I'm just not convinced there was a better deal out there for the Goodreads folks *or* the site/community.

And, back to Wiki-speculation: the only credible alternatives I see to yahoo are Google and AOL. Six of one, half a dozen of the other, no?

The thing is, the only product Wikipedia (as a commercial venture) can call its own is its traffic. The eyeballs. They could put up a paywall, trying to sell or license the content but that would be...troubling?

There's not much of a commercial venture there except as what it is: a communal encyclopedia funded by a non-profit. Any other model lands you in ad-land or a crap-storm.

[fjtorres]

Originally Posted by hwlester

Yes, Amazon picked up Woot a while back (two years ago?).

Going on three.
Interestingly enough, their rationale was similar to the Goodreads buy, reaching out to people who *weren't* well-served by teir existing webstore.
Here's CBS' take at the time:
http://www.cbsnews.com/8301-505124_1...-surprise-you/

The NYT hypothesized that Amazon's interest in Woot is based in its pursuit of those very same impulse buyers. Its coverage of the acquisition says:
Although Amazon has long offered its own daily deals, Woot attracts impulse shoppers that Amazon has not been able to capture, said Sucharita Mulpuru, a principal analyst covering e-commerce at Forrester Research. "Amazon is a destination that is all about focused buying; you go there when you're looking for something very specific," she said. "Woot is about persuading you to buy something you didn't even know you needed."
But ReadWriteWeb has a more instructive take from marketing guru Michael Vorel, who argues that the acquisition will serve two purposes. Firstly, he says, the items sold on Woot have such thin margins that the real value must be in something else: namely, the behavioral information Amazon can gather from such "real-time" buying (real-time, he says, in the sense that TV shopping is real-time). Secondly, Woot gets about 10% of its referral traffic from Facebook, which means that those real-time purchases are tied closely to buyers' social graphs.

But Vorel doesn't go far enough in his appraisal. Yes, the real-time connection is important -- it allows Amazon to test incentives -- and yes, Facebook's contribution is important. But both those points neglect the real concept that will superintend both real-time buying and Facebook in the next five years: mobility.

Woot is a dead-simple concept that is ripe for social activity, which is why Facebook is already the source of so many referrals. (If you see a cool item on Woot that seems right for a friend, you may be likely to share it promptly because the deals expire so quickly.) But dead-simple sales concepts are also ideal for smartphones, which are less adept at at granular searching and long-tail shopping.

As I said, Amazon finds value is the oddest of ways.

[QuantumIguana]

Originally Posted by porkupan

Well, that's the way of the world, isn't it? The members assumed they were part of a community, but ended up being the product.

Or perhaps they are both.