Home » Amazon, Disruptive Innovation » Why Didn’t Someone Else Buy Goodreads Before Amazon?

Why Didn’t Someone Else Buy Goodreads Before Amazon?

30 March 2013

From James McQuivey on Forbes Blogs:

I fell asleep on a train yesterday and missed one of the most noteworthy events of the week: Amazon acquired Goodreads.

. . . .

I’ll do my best to be objective in answering all the anger being expressed on Twitter and in the trades when I point out that Goodreads was not saving itself for Amazon like some virginal tribute. It has been sitting there, all along, waiting for the right offer to come along. That’s how venture capital works, people.

. . . .

I have an important question to ask, one that I am stealing from author Nick Harkaway (@Harkaway) who wrote this on Twitter the morning after:

The point isn’t that Amazon bought GoodReads. The point is why GoodReads wasn’t snapped up by a publisher years ago.

The obvious reason is that based on the rumors of a purchase price in the “low eight-figures” as some are confidently whispering, most publishers weren’t really in a position to buy Goodreads. Unless they had seen this coming and had bought it many years ago. Let’s say back in 2010, when I first urged one of the Big Five (are there five now?) publishers to buy it.

. . . .

Digital disruption is built on — and therefore requires — direct digital customer relationships. Publishers haven’t had direct relationships of any kind historically — in fact, they are the first to admit that their customer was the book buyer at Barnes & Noble. This used to be a good thing until digital disruption came in and made it not so much a bad thing as an old thing. In the race to grab a customer relationship publishers have worked hard to build pages on Facebook, they’ve tried to reinject energy into their genre portal sites (Suvudu.com, anyone?). But none of them have managed to create anything as powerful and as useful to both themselves and to readers as Goodreads.

Only with a direct digital customer relationship can you learn from the customer in real-time, rapidly expand your total product experience, and easily offer new benefits to your customer.

. . . .

In each case, the solution to keeping up with digital disruption is to have a customer relationship, one that digital tools and platforms make incredibly cheap and increasingly powerful. Goodreads is one such tool. It still is, by the way, even now that publishers will be wary of it. And so I’ll offer this one piece of advice to publishers who may now feel like they should back away from Goodreads for fear that they are sleeping with the enemy: Don’t do it.

Link to the rest at Forbes Blogs

Amazon, Disruptive Innovation

24 Comments to “Why Didn’t Someone Else Buy Goodreads Before Amazon?”

  1. Ultimately, with Amazon’s purchase of GoodReads comes an inherent responsibility to keep it a site we enjoy, or we will abandon it. True democracy lives in our thumbs, people.

    • Exactly! There are a lot of doomsayers, but what they forget is I will only use Goodreads so long as it adds to my life.

    • That’s the one angle that hasn’t been commented on enough: GoodReads kind of sucks. Being a wholly-owned subsidiary (or whatever) of The ‘Zon might make it not suck. Those smarty-pants young’uns in Seattle seem to know a thing or two about creating useful websites.

  2. BarbaraMorgenroth

    BigPub didn’t buy Goodreads because they were so busy curating important literature like 50 Shades of Gray.

  3. Turow was whining about this. My repsonse:

    Grand Central’s acquisition of Scott Turow’s latest novel is a textbook example of how modern publishing monopolies can be built… The key is to absorb writers before they can write for another publisher. With his millions of fans, Turow could have easily sold his novel to a competing publisher, or even published himself and made a better royalty percentage. Instead, Grand Central has scuttled that potential and also squelched the chance for other publishers to make money from Turow. As those in publishing have long known, the key to driving sales is controlling authors. This is a truly devastating act of vertical integration.

  4. “Turow was whining about this. My repsonse:”

    Where did this exchange take place?

  5. What I hope doesn’t happen is that owners of other ereaders don’t get left out. People with nooks and kobos and even the small few who have a sony use goodreads.

    • What has been said publicly is that the Kindles will get direct access to good reads but the website will remain open to all comers. Goodreads will not be stopping the Kobo feeds.
      Now, whether Kobo wants to keep doing business with Goodreads…

      • Good point. If they choose not it would be like the case of shooting off your nose to spite your face.

  6. This is not new: Amazon has been “getting there first” in numerous ways for the last 5 years.

    Publishers need to wake up, if they want to survive. Maybe this will jolt them (and even embarrass them) enough to get them moving.

    • Wishful thinking, Mira. The BPHs are awake, but they want a Prince Charming to come in and save them.

      Goodreads has been sitting out there for how many years? When Amazon bought Shelfari outright and a stake in Library Thing, that should have been a clue. But the BHPs wailed and gnashed their teeth and didn’t do a damn thing.

      Oh, wait, they did do one thing. Illegally conspire to price fix their merchandise.

  7. Take a look at who in the publishing world is asking this question:

    McQuivey (research analyst)
    Shatzkin (Big Pub’s clueholder*)
    Nick Harkaway (trad pub author w/a book subtitled Being Human in a Digital World)

    In short, the people who have spent some time thinking about the impact of digital disruption. That almost certainly means that acquiring Goodreads was the subject of conversation at the big publishing firms, B & N, Kobo, et. al. And none of them did it. Instead we have Bookish.

    Two years ago when they started signing people up for Bookish, the owners (S&S, Hachette, and Penguin) of Bookish could have bought Goodreads for next to nothing. Instead they had nothing for two years. And not just any two years. 2011 and 2012. This is not just second-guessing either. The only thing they know now that didn’t know when Bookish started was how incompetent they were at building a startup. Assuming they realize that now.

    *The term clueholder came about in a conversation I had with some of my friends (who were also co-workers on a team that provided second and third level tech support) about 15 years ago. I described someone as “the one on the help desk who has a clue”. To which my friend replied, “You mean, there can be only one?” (It was the late ’90’s and Highlander was still big with geeks).

    I pointed out that anyone who worked on our help desk who had a clue would inevitably get promoted or leave for a better job (which is often the condition in corporate IT). The helpdesk supervisor always managed to find a replacement for the “clueholder” when he or she left. Apparently in Big Pub, the clue is passed down from father to son or something…

  8. Wow, these comments here and the comments on the original article were so entertaining! I love it when well-read people bash heads. Fashionably epistolary. I am still surprised when the anti-Amazon folks put their fingers in their ears and sing-song LA LA LA LA LA when a self-published author states the economic truths. I was astonished by the “shut your mouth” and “end of discussion” responses. Those faithful to traditional publishing probably think self-published authors are dabbling in the Dark Arts. They must refuse to listen to the Devil’s tempting lies lest they lose their souls. Hell, with 70% royalties, we can buy a really nice air conditioner if it gets too hot.

  9. There are a lot of readers questioning it, not just trade publishing darlings, to be fair. I am in several reading groups on Goodreads, and they are afraid they are going to lose their groups completely to a payment requirement, or for being what Amazon considers inappropriate, or they will be unable to moderate them, a la Amazon forums. I think a lot of Goodreads popularity is through the groups. Frankly, that concerns me as well, that Goodreads will lose it’s effectiveness. I get a good number of my reviewers from Goodreads, because they will post in both places. I think saying everything is peachy is premature, but I also think it might not be as bad as many in the trade industry are lamenting.

  10. William Ockham has it correct.

    Why on EARTH create ‘Bookish’ when S&S, Hachette, and Penguin could have had Goodreads for a song.

    But putting all of that aside, the one thing authors might forget in all the hullabaloo around this issue: It’s vital to remember that WRITING should remain the central focus, because word-of-mouth about great books will eventually transcend all of these temporarily disruptive changes.

    ~Jonathan

    PS. Passive guy, I’ve posted an ‘impact on authors’ report on the Bestseller Labs blog. Hope it’s OK to link to it here: http://bit.ly/Amazon-Goodreads

  11. So it was sold for a low 8 digit figure… now where does that money go?
    Does at least some of it go to the members who made Goodreads happen for FREE? A little bonus and thank you for their contributions? Or is it like Huffington Post where millions of dollars went to Ariana to join her other billions but not a dollar cent to (the often financially) struggling authors that gave it its value? People hoard personal wealth as if they were panning to live for 500 years. WHY?

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