Who Owns Goodreads? (And why)

Who Owns Goodreads? If you haven’t googled it yet, the “About” page on Goodreads won’t give you a straight answer, just a “Message from our co-founder.” You have to click all the way into the “Career” page to find a direct statement about who owns the platform. Half way down the page it says “If an Amazon company…”

In other words, Amazon owns Goodreads. While direct mentions of the parent company are scarce on Goodreads, Amazon’s fingerprints are “the world’s largest site for readers and book recommendations” anywhere.

Let’s dive in Why Amazon bought the world’s largest platform.

Who Owns Goodreads?

In 2013, Amazon bought Goodreads for about $150 million. The acquisition called back to Amazon’s roots as a site that once sold nothing but books. In 2013, Amazon was a sales giant in both print and ebooks, thanks to Kindle and its self-publishing platforms.

The sale of Goodreads initially caused such a frenzy that analysts estimate the sale at $1 billion. Although the final number was a fraction of that, it was still a significant part of the change. So what did Amazon get for all that Bezos money?

Goodreads Start

Goodreads was launched in 2007 by married partners Otis Chandler and Elizabeth Kaur Chandler. According to Goodreads, Otis said he wanted to recreate the experience of walking into a friend’s living room and checking out their bookshelves. He was also inspired by the book-like blogosphere, where readers commented on reviews on blogs. Goodreads was designed to create a platform site for those reviews. Add the digital book tracking via ‘shelves’ and the site was born. Goodreads is designed as a “long tail content” site, meaning its value comes from the breadth of the content. The site contains millions of reviews on millions of books. Efficient SEO drives most people searching for “Book title + review” to Goodreads.

The Chandlers’ approach worked. By the time Amazon called, Goodreads had a staff of over 100 and 16 million users. The Chandlers, who remained as CEO and editor-in-chief after Amazon’s acquisition, stepped down from Goodreads leadership in 2019.

What’s in it for Amazon?

Kindle Integration

The Kindle/Goodreads integration is one of the main selling points for both Amazon and Goodreads. In his 2016 HustleCon lecture, Otis said the ability to integrate the Goodreads social platform into the Kindle made the acquisition “exciting” (that, and the millions of dollars Amazon put on the table).

After purchasing the site, Amazon added a new social aspect to the Kindle reading experience. New Kindle users will now be prompted to link their Goodreads account. Starting with the Kindle home screen, the home page loads a user’s “to read” list. Kindle Highlights are automatically added to Goodreads and a user can choose to post live updates on reading progress from Kindle to Goodreads. The Kindle asks you to rate your reading experience on Goodreads once you reach the end of the book. More Kindle integration may be coming. The Goodreads career page states, “We are deeply integrated with Kindle and have great opportunities to invent the future of reading in partnership with Kindle, Audible, Alexa and more.”

The Kindle integration could be a big reason behind Goodreads’ growth. When Amazon bought Goodreads in 2013, the site had about 16 million users around the world. By July 2019, users had reached 90 million, according to Statistica.

Goodreads as Storefront

Amazon is the largest bookseller in the world and they have turned Goodreads into a highly personalized storefront. Whenever you click on a book’s Goodreads page, the most prominent “buy” option is Kindle if the version is available. Expand for more options and you get Amazon and Audible (another Amazon company).

Screenshot of buying options on Goodreads (beta).

(Going into Settings allows you to add and rank more online buying options, but it’s not an intuitive switch). Now most book sites link to Amazon to generate profits, but Goodreads has an advantage with the sheer number of users actively looking for their next book on the site.

Goodreads also benefits the publisher side of Amazon. Amazon has its own publishing house and platforms. The company currently has 15 imprints ranging from Women’s Fiction to Sci-fi to Young Adult. Thanks to Kindle, the imprints are major players in the ebook market. According to Quartz, 9.5% of ebooks sold in the US in 2017 came from Amazon’s imprints. Conveniently, the banner ads on Goodreads often promote Amazon’s own books. Goodreads ads also push Prime and Kindle Unlimited, promoting that both programs offer access to “free” ebooks based on a membership fee.

Goodreads is a data goldmine

There are 90 million Goodreads users who mark books as read and read and hand out various star-rated galaxies as they rate and review books. All those clicks provide insights into individual reader preferences and potentially create the reader’s own custom-designed literary concierge that can predict your next five-star reading. Presumably, Goodreads uses machine learning to make recommendations. However, if you’ve ever thought about Goodreads’ “personalized recommendations,” it’s clear that Goodreads hasn’t put much effort into that direction. (Luckily, there are real people at TBR who can help a reader.)

While individual insights are nice (and underused), the real value is tapping into the reader’s mind. Amazon can mine millions of readers’ bookshelves to see what’s trending in books and reading habits. Goodreads could reveal fascinating insights into readers’ habits during the pandemic. How many readers have put cozies on the shelf? Was there an increase in travel stories? Bookworms everywhere want to know! For now, however, Goodreads seems to be hiding that most valuable data.

Your Attention, Please: The Value of Interaction with Readers

Ultimately, a tremendous value in Goodreads is the interaction with the reader. As noted above, that interaction yields tons of valuable data. But just having your attention is also valuable. Michael Goldhaber predicted the huge currency of screen time back in 1997 when he invented the “attention economy.” The term refers to the idea that our attention is a source of fear – you can only process one thing at a time. Goldhaber said of our mental bandwidth: “Ultimately, the attention economy is a zero-sum game. What one gets, the other is denied.”

By acquiring Goodreads, Amazon ensured it could gain access to the most active readers. if The Atlantic Ocean noted in 2013, “When all is said and done, Goodreads is about as influential in the book world as Facebook.” Whether you’re adding books to your shelves, reading reviews, or clicking “buy,” Amazon has your attention.

What do readers lose when Amazon wins?

Buying Goodreads puts Amazon in control of the largest reader platform. It gets more sales, more data and more clicks. It also destroys competition for social book platforms. Why? Well, it’s extremely difficult to monetize a book site unless you have a link to Amazon. And Amazon is unlikely to award partner status to actual Goodreads competitors. There are worthy alternatives, but none have been able to match the size of the Goodreads user base. Additionally, Amazon has been locking down the Goodreads API since 2020, making it nearly impossible for third-party apps to build on the site’s experience.

The new statesman noted that without competition, “Amazon has very little incentive to improve Goodreads when there is no serious competitor and its ‘core experience’ is good enough.” That may be why the interface is notoriously clunky and the “Ideas” section of the Goodreads website looks more like a graveyard than a working collaboration. But with 90 million readers, I hope Goodreads will come up with something brilliant from all those star shelves. After all, as co-founder Otis Chandler said at HustleCon, Goodreads is “just on the surface… of the future of digital reading.”

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