Amazon.com to Acquire Goodreads

[latepaul]

I think you're right they were gearing up to sell books. I think that would have been an interesting and tricky transition in itself. Many people would be just as upset with a social site turning into a bookseller as are upset with the Amazon takeover. In any case I think GR needed to cash out and taking the Amazon money was clearly an easier route to do that.

[fjtorres]

Originally Posted by latepaul

I suspect that without a lot of start-up money cash-flow would be a very tricky balance. Probably you'd either fail completely or level out at a small-to-medium size site (1,000s users) where you couldn't grow easily to the next level without more money. Which could be fine but certainly not an Amazon-killer.

There is a solution to the money issue: find a big backer prepared to invest lots of money up front and wait months or years for you to establish yourself before you're profitable. That gives you time to develop the site. Time to attract users. Time to attract advertisers. However that's basically what Goodreads did and they probably would never have got the VC money if they had hamstrung themselves by promising never to capitalize on one of the biggest assets they had - the user data.

Plus, as Daffy Duck pointed out, the best acts only work once.

There is no guarantee a straight GR clone would ever get enough traction to get going. It may simply be too late in the game to start now with a few hundred reviews to compete against a site with millions.

Look at whats happened to Google+ in trying to take on Facebook.
Online communities live or die by network effects so unless there is a massive stampede away from GR the likelihood of anybody acquiring a critical mass of membership to be a real competitor seems unlikely.

That right there might be why Amazon got Shelfari for (a reported) $10M but had to cough up (an estimated) $150M for GR.

[Prestidigitweeze]

Originally Posted by jgaiser

Cool!! A great way to start a reasonable conversation. Compare people who disagree with you to Glen Beck.

Actually, the comparison was between statements, not people. Saying that people who criticize the acquisition of GR "hate Amazon" seems quite like Beck's equating criticisms of supply-side economics with "hating America." In both cases, a stance regarding policy is being conflated with the projection of nasty emotions.

Besides, for every Glenn Beck, there's a reasonable person who shares certain of his views but opposes his rhetorical tactics.

I'm all for people expressing their support of the GR acquisition. But I'm also for the expression of indifference and opposition. It's not as if any of those positions are inherently more emotionally sedate or well-adjusted than the others.

[Rizla]

There are a plethora of examples of very large and active forum-type sites that do not need to charge users money to stay alive. I cannot for the life of me see why a site dedicated to books and reviews should be any different.

[NickyWithNook]

They probably didn't need money to stay afloat. Their advertising probably brings in a reasonably good amount. They probably wanted the $150M. And I can't blame them for that.

[CWatkinsNash]

Originally Posted by Rizla

There are a plethora of examples of very large and active forum-type sites that do not need to charge users money to stay alive. I cannot for the life of me see why a site dedicated to books and reviews should be any different.

It's getting more difficult than it used to be. Using GR as an example, there are three noticeable camps of users:

- users that don't mind ads
- users that say nothing but just turn on their adblocker
- users that vocally wish for a paid membership option to turn off the ads

In order for ad-based monetization to work, the majority of active users needs to fall into the first camp, balanced with enough members in the third camp to fund the site costs on an ongoing basis between the two of them (assuming you choose to implement the paid option). You can swap the numbers of those two groups, but they always have to overcome the adblocking group.

The difficulty for a new site starting up is not yet knowing the traits of your user base, because they haven't shown up yet. One must plan based on what currently works and hope that the same applies, and must be willing to adjust and even take a temporary loss if the plan isn't working.

A site that monetizes with ads from the get-go risks turning off users if they don't implement it with the right balance, which can be very tricky since your ad space has little value in the beginning. A start-up sponsorship from a related company can work, if you can get one, but it has to be relevant and it has to look like something other than commercialization of the resources you provide to users. You also have to have a plan in place in the event your sponsor tanks or has a damaging event, to avoid damage to your own brand.

I'm actually in the process of drafting a monetization and development road map for a new site right now, though it's not about book reviews. In my case, the only way forward is to focus on community development first, then seek appropriate sponsorships once my on-screen real estate value increases.

TL;dr - it's not as easy as it seems.

[avantman42]

Originally Posted by Rizla

There are a plethora of examples of very large and active forum-type sites that do not need to charge users money to stay alive. I cannot for the life of me see why a site dedicated to books and reviews should be any different.

One obvious difference between Goodreads and a forum site is that there is plenty of forum software available, much of it free. I don't know of any free software available with Goodreads-like functionality, so it would have to be written from scratch, which means cost (in time, money or both).

[danskmacabre]

Originally Posted by latepaul

You should read the threads on the Goodreads feedback forum!

The thing that leaves me shaking my head is the number of people who seem to have no idea that Goodreads is, and always was, a commercial business. Also it was a VC-funded business which means it would always be looking for a point to either float or sell.

I don't hate Amazon, actually I've spent 1000 of $$s buying products via their site.
I appreciate GR was a business and all that.

But I don't want to add content to a site that is now owned by (among many other things) a book distributor. Eventually they will push out other book sellers, etc from GRs.

[danskmacabre]

Originally Posted by BearMountainBooks

I suspect they will be surprised by the number of people who do so.

I agree.

Not that I blame them for the deal one bit. How can you turn down that kind of backing and money?

No of course, at the end of the day is for the vast majority of people is it's all about the money.
I'm not particularly bitter about all this, but for me it's time to move on.

[idraw22]

Amazon owns Library Things too!? I had no idea... maybe theyre trying to corner the ebook stock market thingy!

[auntykatkat]

I am one who deleted my data from GR. I do not "hate" Amazon. I did not do reviews but did rate what I read. I usually only get $0.00 e-books from them. I think I spent a grand total of $30.00 or less last year.

My issue was the monopoly that is being formed. When they are the only one who publishes, reviews, and sells we will have a big problem. I seem to remember my history about other monopolies that took all the money and stopped competition. Amazon may do things well, but in the end I see us all losing if it continues to grow unchecked. My father was part of the breakup of AT&T and the Bell's. I remember, I wonder if it is going to happen again with Amazon.

[AnemicOak]

Amazon's a long way off from being a monopoly.

[Kumabjorn]

Originally Posted by AnemicOak

Amazon's a long way off from being a monopoly.

Perhaps, but they seem to be moving in that direction. Not that I'm blaming them, once you reach a certain size is almost a Natural Law.

[TCSimpson]

People tend to forget there's a little something called Antitrust laws.

[Kumabjorn]

Microsoft remained, at one point they must have owned 90 % of all OSes out there. If that doesn't fit the definition of a monopoly...