Amazon bought Goodreads, but it won't break it
It's almost as if Amazon announced two acquisitions today. When the retail giant bought social reading site Goodreads, people were excited at the prospect of having the site more integrated with their Kindles. Then, when Amazon bought Goodreads, people despaired that it was tightening its chokehold by eating up the last community of readers independent of Amazon.
Those opposite attitudes are in keeping with the two Amazons that are out there: One that has shown time and again that nearly everything it does is aimed at the goal of improving the overall experience for its customers, and another that has so shaken up the publishing industry that it's becoming too powerful a force in books.
Which way will it go – will Amazon make Goodreads better, or will it be its ruin? There's evidence on both sides. Amazon already owns Shelfari as well as Abebooks, which bought a 40-percent stake in LibraryThing in 2006, so it owns all or part of three of the top social-reading sites.
And Amazon has a history of trying to strongarm these communities. In 2009, to maintain a book-data partnership, LibraryThing revamped its site to link solely to Amazon.com. Last year, Goodreads faced a similar choice and said no, switching data providers instead. Even today, with a link to the Amazon announcement at the top of its home page, Goodreads still uses Barnes & Noble as its preferred retailer.
The concerns of Amazon-wary readers, authors, and independent booksellers over this deal are valid. And I hope they are made loud and clear so that Amazon feels pressure not to change a social site that is working well for its members. But there is a strong case to be made that, while Amazon is likely to integrate Goodreads reviews and recommendations into the Kindle itself, it's prepared to take a hands-off approach to the rest of the site.
Startups are often loathe to be bought out by a big Web giant. Too often, there is an oil-and-vinegar mix of corporate cultures. The features and spirit that made a startup successful are crushed inside the bureaucratic demands of the parent's core product. Founders languish under profit-minded executives of the parent company, chained by employment contracts signed as part of the deal.
Amazon has a pretty unusual track record in this regard. The company is very selective about acquisitions, typically no more than three or four modest deals a year. The $1.2 billion purchase of Zappos is a rare exception. And most of the time, the content sites it acquires remain so independent that many of the consumers who visit them aren't even aware they are Amazon-owned properties.
In 1998, Amazon bought IMDB, a site that is probably second to Wikipedia when it comes to settling bar bets. Although Amazon has been selling DVDs, downloadable videos and streaming movies and TV shows for years, the two sites have remained barely integrated. On most of IMDB's movie pages, Amazon is mentioned only at the bottom of the page. Amazon did start inserting Instant Video links into the IMDB mobile app this week, but that came 15 years after the acquisition.
Over the years, Amazon has made a number of content buys, mostly well-produced niche sites that have changed little in look: Alexa Internet, dpreview, Box Office Mojo. Again, there is little or no Amazon branding on or integration with these sites. Amazon may find them a valuable source of data, but as far as consumers are concerned, they still look like independent sites.
Similarly, online stores like Zappos, Shopbop, Woot and Abebooks haven't been swallowed into the Amazon store and remain independent units. The core Amazon site may loom large as a department store, but it also has a nice little strip mall on the premises.
Like any Web giant, Amazon does maintain a walled garden, but unlike others its walled garden is built for its loyal customers. It doesn't aim to trap people inside its ecosystem who don't want to be there. That doesn't mean the company won't step on a lot of toes, as it did with demands that content partners link exclusively to its store. It means it would rather have a loyal customer base than a captive audience.
Which is why the concerns about the Goodreads deal are important to voice loudly. In an interview with PaidContent, Goodreads CEO Otis Chandler said that Goodreads' open API will remain in place under Amazon. Russ Grandinetti, an Amazon Kindle VP, insisted the company was taking a “first do no harm” approach, a promise that I'm sure skeptics of this deal will remember.
If past is prologue, though, Goodreads will remain independent inside Amazon, which is unique among tech companies in giving its acquired units such a long leash. It's not clear what Bezos is gaining with such a rare hands-off approach. Perhaps the data provided by so many successful startups is enough. Or maybe Bezos has some long-term plan for bringing them into the Amazon brand. Given the patience Amazon is known for, it may be some time before we know for sure.
(Photo courtesy of Flickr user wentzelepsy.)