Amazon’s Purchase Of Goodreads Could Be Good

The doom-mongers have been running wild on Twitter with the news that Amazon is to acquire Goodreads. Much of that nonsense is typical (i.e. hysterical) Amazon bashing, or reflexive defense of the status quo.

This post is from 29 March 2013. It has not been updated except to clean up broken links but comments remain open. For something fresher, head to the blog homepage.

I’m not going to deal with the Chicken Little stuff. I have less and less patience with people who claim that Amazon has or is striving for some kind of evil monopoly that will subjugate authors and readers when all the evidence to date is that they will treat authors better than any publisher and provide readers with cheaper books, a bigger selection, and a better customer experience than any other retailer.

There are some more reasonable fears about what this purchase entails. I would like to deal with these in turn, then discuss how I think this acquisition will be beneficial to writers – particularly self-publishers. I respect the fact that this is a hot-button issue for many, and that reasonable people will disagree with my perspective.

I welcome any (respectful) discussion on these points, and I’m open to being convinced by the opposing side.

As I see it, some of the more reasonable fears about this purchase include:

1. Amazon will change Goodreads from being an independent home for readers to discuss the books they love

I can understand this fear – particularly if you are a Goodreads user, and spend a lot of time in the site. It’s not unreasonable to be worried about what happens next with a site that you love. I also understand the feeling of ownership that (rightly) develops in a community like Goodreads – especially one that has literally built the site into what it is today.

No-one has a crystal ball here, but all the indications are that Goodreads will retain its independence. That point was stressed in a blog post from Goodreads CEO Otis Chandler. He said that Amazon has pledged to support Goodreads in “continuing to grow our vision as an independent entity, under the Goodreads brand and with our unique culture.”

Chandler went on to say this:

It’s important to be clear that Goodreads and the awesome team behind it are not going away. Goodreads will continue to be the wonderful community that we all cherish. We plan to continue offering you everything that you love about the site—the ability to track what you read, discover great books, discuss and share them with fellow book lovers, and connect directly with your favorite authors—and your reviews and ratings will remain here on Goodreads.

You might argue that’s typical merger/acquisition PR spin, but until there’s any evidence to the contrary, I think we have to take Otis Chandler at his word. After all, Goodreads would be nothing without its fantastic community of readers. Why would they mess with the very thing that makes Goodreads what it is?

If you are more worried about Amazon’s intentions, here’s Amazon VP Russ Grandinetti in a revealing interview with PaidContent’s Laura Hazard Owen:

Our mentality here is to first do no harm, and make sure that if we’re going to do integrations, users genuinely find it to be a big benefit.

Again, you might say talk is cheap, that actions speak louder than words. Well, let’s look at Amazon’s actions.

Amazon purchased a 40% stake in LibraryThing seven years ago. It bought Shelfari outright five years ago. It bought fifteen years ago. The independence and brand of those communities has not been compromised in all that time.

Again, nobody can see into the future, but we have the words (and deeds) of the main players here to guide us.

In Otis Chandler’s blog post on the purchase, he stressed that:

It’s incredibly important to us that we remain a home for all types of readers, no matter if you read on paper, audio, digitally, from scrolls, or even stone tablets.

There’s no prevarication or doublespeak there. It seems pretty clear to me that links to other retailers will remain. Again, if this is a promise they break, the community would be outraged, and Goodreads is nothing without its community.

Some worry that links to other retailers won’t have the same prominence as before, that Amazon’s links will now be front-and-center. Honestly, Amazon’s links should be front-and-center. They are the biggest retailer of books in the world, with the highest-rated customer service, and manufacturers of the most popular e-reading device.

Not having Amazon links in a prominent position (which is how things have been for the last year after the Goodreads/Amazon data dispute) does a disservice to the majority of Goodreads users who are Amazon customers and/or Kindle owners.

3. Amazon will force the integration of Amazon and Goodreads reviews

I can understand why Goodreads reviewers would be worried about this. They put a lot of time and effort into their reviews, and may not want them appearing on the Amazon site (for whatever reason).

But I don’t think that’s going to happen. All the indications are that automatic cross-posting of Goodreads reviews to Amazon will be a (potential) option – not something that something that is going to be forced on anybody.

From a practical standpoint, forced integration wouldn’t really work anyway. There’s a very different review culture on Amazon and Goodreads. The latter’s reviewers are famously tougher – which is partly explained by the guidance both sites hand out to reviewers (3 stars on Amazon tends to mean “so-so” or “mediocre” whereas on Goodreads it usually means “I liked it but it didn’t blow me away.”)

Again, it comes down to what’s best for the community. As Otis Chandler said:

We’re going to think about this in terms of what’s best for our members. Maybe if we find books that don’t have any Goodreads reviews we might consider that, but I don’t think there’s any specific plans to do that at this time.

4. Goodreads will become a site exclusively for Kindle owners

The statements above are quite clear that this isn’t going to happen, and that Goodreads will remain a home for anyone who loves books – however they read them.

It’s also clear that Amazon and Goodreads will be working together to provide extra features for Kindle users. Owners of other devices may gripe about that, but I think that’s the wrong way to look at it. This purchase has enabled the new features not prevented them for other devices. Amazon can hardly be expected to provide the technical know-how on how to integrate features onto EPUB devices they haven’t designed or manufactured.

5. Amazon will force Goodreads to stop providing reviews to Kobo

To be frank, I expected Goodreads to stop providing reviews to Kobo at the first opportunity. I was very pleasantly surprised to hear that won’t be the case. Again, Otis Chandler couldn’t be clearer: “we’re not going to shut [the Kobo feed] off.”

I think that’s cool and a gesture of good faith. Some members of the community may place little stock in these words (and past deeds), but they should take some comfort in the fact that clear pledges have been made by Amazon and Goodreads about what happens going forward. If they break their word, the community will be able to hold their feet to the fire. Which leads on to the next question.

If all the above is true, why did Amazon buy Goodreads?

In a word: data. Goodreads has millions of users who have rated millions of books. That data alone makes this acquisition attractive to Amazon.

Amazon’s success is powered by a complex, data hungry recommendation engine. The more data Amazon can crunch, the more accurate those recommendations will be. And the more accurate those are, the more money Amazon makes.

Goodreads has also made big strides in improving its own book recommendation algorithms, and I’m sure Amazon is excited about looking under the hood, seeing how it all works, and applying that knowledge to their system.

If you have an issue with that, then you should pretty much stay away from Google, Facebook, Bing, Yahoo, and any other large internet site that routinely collects user data.

Amazon’s interest doesn’t end with data. Goodreads has been making steps towards monetizing its site more effectively. Often such moves are met with resistance by users, but its inevitable on any free site. Everyone has to come up with some way of keeping the lights on.

It’s also clear that Goodreads didn’t have the funding internally to make all the improvements it would have liked to serve its users better. This deal will allow them to do that.

I’m also sure that Amazon has a plan to help Goodreads monetize the site more effectively. It’s what they do. Again, if you have a problem with that, it would have been the same had anyone else purchased Goodreads (and it was inevitable that somebody would).

How does this acquisition help self-publishers?

I see three primary benefits:

1. More advertising opportunities on Goodreads, and a better return on investment. Goodreads already has an advertising program, but it’s hardly the best ROI in the business. Amazon has the experience and know-how to improve the program – and self-publishers are always looking for more (effective) places to advertise their books.

2. Amazon’s recommendation algorithms will be vastly improved with all the data that Goodreads has been collecting. Anything that makes Amazon a more trusted source for book recommendations levels the playing field for self-publishers – the vast majority of whom make 90% (or more) of their sales at Amazon, despite the Kindle only having around 60% of the market.

3. Amazon buy links will no longer be obscured at the bottom of a long list of other retailers (where self-publishers don’t sell as well).

4. Finally, all these new features that are being talked about will make the Kindle a more attractive device. Because Amazon provides self-publishers with a much more level playing field than the other retailers, this gives us a fairer chance of nabbing those readers.

These are my initial thoughts on the purchase. Of course, we’ll have to see how it will all play out. What do you think?

David Gaughran

David Gaughran

Born in Ireland, he now lives in a little fishing village in Portugal, although this hasn’t increased the time spent outside. He writes novels under another name, has helped thousands of authors build a readership with his books, blogs, workshops, and courses, and has created marketing campaigns for some of the biggest self-publishers on the planet. Friend to all dogs.