April 1 (Bloomberg) -- Amazon.com Inc. is gaining too much control in the publishing industry with its purchase of Goodreads Inc., a social network for readers and a competitor in online book reviews, an authors’ group says.
Goodreads, which allows users to add titles to virtual bookshelves and track what friends are reading, has 16 million members who have written more than 23 million reviews, Amazon said in a March 28 statement. The company said the deal will probably close in the second quarter and didn’t provide terms.
The site had potential to become an Internet bookseller to compete with Amazon, the largest online retailer, Scott Turow, president of the Authors Guild, said in an online post March 29. Amazon began as an online bookseller in 1995 and is seeking to spur virtual book sales through its Kindle e-readers. As readers shift to digital content, publishers have said Amazon devalues content with low prices that make it hard for them to compete.
“Recommendations from like-minded readers appear to be the Holy Grail of online book marketing,” said Turow, whose legal thrillers include “The Burden of Proof” and “Presumed Innocent.” “By combining Goodreads’ recommendation database with Amazon’s own vast databases of readers’ purchase histories, Amazon’s control of online bookselling approaches the insurmountable.”
Other Amazon acquisitions in the past decade that increase its role in publishing include Audible Inc., an audiobook seller, in 2008 and the 2011 buyout of British bookseller Book Depository Ltd., according to data compiled by Bloomberg.
The Kindle Fire HD tablet computer was Amazon’s most popular item in 2012, the Seattle-based company said when it posted fourth-quarter results in January. The line of Kindle tablets and e-book readers held the top four spots on Amazon’s worldwide best-seller list at year-end.
While the acquisition of Goodreads gives Amazon the ability to help users find and review more books, that may not be so bad for publishers, according to Brian Blair, an analyst at Wedge Partners in New York.
“It strengthens Amazon’s book-selling capabilities because it makes discovery of new books easier,” Blair said. “Making good books easier to find and staying up with what your friends are reading and enjoying is a good thing for all parties involved, especially the consumer.”
Tom Forte, an analyst at Telsey Advisory Group in New York, said he also doesn’t see the purchase as a threat to publishers.
“This seems more like a better way to sell books on Amazon than an opportunity to create another e-commerce book-seller,” Forte said.
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