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Amazon to buy book-focused social network Goodreads

The purchase of the niche social network is expected to help Amazon sell more physical and digital books. Members express concerns about the deal.

March 29, 2013|By Andrea Chang, Los Angeles Times
  • Goodreads was founded six years ago by Otis Chandler, the grandson of a longtime Los Angeles Times publisher by the same name.
Goodreads was founded six years ago by Otis Chandler, the grandson of a longtime… (Michael Robinson Chavez…)

Amazon.com Inc., which got its start as an online bookseller, went on to create the Kindle e-reader and has gotten into book publishing, is now pushing into the social side of reading.

The world's largest online retailer said Thursday that it had agreed to buy Goodreads, a popular book recommendations site with more than 16 million members. The purchase of the niche social network is expected to help Amazon sell more physical and digital books.

Goodreads was founded six years ago in the Los Angeles living room of Otis Chandler, the grandson of a longtime Los Angeles Times publisher by the same name. Chandler, who is also the company's chief executive, moved the headquarters to San Francisco last year.

The deal, the most prominent acquisition of a major book-focused start-up in recent years, signals Amazon's growing interest in expanding its reach into all corners of the consumer world. The Seattle company recently opened a wine marketplace; is partnering with automakers to integrate its Amazon Cloud Player — a rival to Apple Inc.'s iTunes — with vehicles; and is developing original programming for the Web.

But books have always been a core interest for Amazon, which was founded in 1994 by Jeff Bezos. The two companies didn't disclose the purchase price, but one well-known technology blogger cited unnamed sources as saying the deal was worth about $150 million.

On the Goodreads website, members can list, rate and review books they've read; cite and share passages; and discover new books by using the site's recommendation tool. It's also become a niche social network for avid readers: Users can see what their friends are reading, comment on their reviews and join online discussions and book clubs.

Goodreads launched in 2007, the same year that Amazon introduced its Kindle e-reader, which propelled e-books to a previously unseen level of popularity and ushered in a new era of change in publishing.

That shared interest in "reinventing reading" made the deal a good fit, said Russ Grandinetti, Amazon's vice president of Kindle content.

"Goodreads has helped change how we discover and discuss books, and with Kindle, Amazon has helped expand reading around the world," Grandinetti said. "Both Amazon and Goodreads have helped thousands of authors reach a wider audience and make a better living at their craft. Together we intend to build many new ways to delight readers and authors alike."

But some Goodreads members quickly took to the site to criticize the deal, suggesting that as Amazon has grown into the online behemoth it is today, it may be turning off the very kinds of consumers it aimed to reach when it first launched. Prominent authors, too, panned the deal.

"Amazon's acquisition of Goodreads is a textbook example of how modern Internet monopolies can be built," bestselling novelist Scott Turow, president of the Authors Guild, said in a statement Friday. "The key is to eliminate or absorb competitors before they pose a serious threat."

Many unhappy members said they were afraid their reviews would become the property of Amazon and would be cross-posted on the Amazon website. Or that Amazon might censor or edit their reviews according to the company's stricter guidelines.

The griping grew so heated that a Goodreads spokesman entered the discussion on the forum. "I know there will be a ton of questions about this, and we're going to do the best we can to answer them," wrote Patrick Brown, Goodreads' director of community. "Our review policy seems to be a frequent topic of concern, so let me reassure you that we have no plans to change how we handle reviews. We do not expect to switch to Amazon's review policy."

In an interview with The Times on Friday, Chandler also sought to downplay concerns, saying, "this move is going to be good for all of us." He called Amazon a strong partner and said that members' reviews and ratings would remain on the Goodreads site, and that Goodreads and its 40-member staff would stay in San Francisco.

"Change always brings uncertainty and makes people nervous, and that's the natural reaction, we get that," he said.

"Amazon has a long history of buying independent brands and letting them flourish," he said, pointing to Amazon's purchases of brands including Zappos.com and Diapers.com. "We're fully expecting that that's going to be the situation here."

Chandler said that Amazon's reach and resources would help his company expand faster and reach new members and that a top priority was integrating the Goodreads and Kindle experiences.

For instance, down the line Goodreads users might be able to add an Amazon Kindle e-book purchase to their Goodreads digital "shelf." Currently, adding a purchased e-book to a Goodreads shelf requires going to its website and typing in the information. Theoretically, when integrated, buying an e-book on Kindle could eliminate that extra step.

To date, Goodreads members have added more than 530 million books to their digital shelves and written 23 million reviews. There are more than 30,000 book clubs on the site.

The acquisition is expected to close in the second quarter.

andrea.chang@latimes.com

Times staff writers Carolyn Kellogg and Hector Tobar contributed to this report.

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