For Amazon (NASDAQ:AMZN), the powerful grip it holds on online retailing is not good enough. According to a Thursday press release, the company acquired Goodreads, the social media site for booklovers vocal about their literary recommendations and dislikes. Though its sales continue to impress, could Amazon be expanding its e-reader base by increasing the quality of offerings and the reading level of its customers?
In Goodreads, you can make the case that Amazon has found its desired “pool of addicts.” Some 16 million readers pass through Goodreads to offer comments, review books, and pass along great reads to friends. Since Amazon’s Kindle is the leading format for e-reading these days, it seems like a natural progression for the king of the online marketplace.
Estimates of Amazon’s investment make it a good buy. Early reports suggesting Amazon spent in the high nine figures gave way to more sober accounts: it will cost closer to $150 million once the smoke clears. With stock prices steadily rising for Amazon, the move to make its e-reader community get a higher literary quotient is a wise move. Goodreads members are known for their passion and are likely to ignite sales of books by lesser-known authors. This feat would not be possible without the influence of Amazon’s fearsome marketing reach.
Naturally, a period of skepticism is likely to follow for current Goodreads members. Users are proud to own the rights to their reviews on Goodreads, as well as their reputation for supporting for supporting book-friendly operations like Barnes & Noble (NYSE:BKS). Will Goodreads members retain the ability to buy books elsewhere? Those features apparently will not change – something current members will likely applaud.
Amazon VP Russ Grandinetti described the marriage as a boon to the authors themselves, another point Goodreads members are sure to love. In the release, Grandinetti notes how the two “have helped thousands of authors reach a wider audience and make a better living at their craft.” In many ways, the same could be said for Amazon’s purchase of the literary social media site. By getting more quality content onto their pages via Goodreads members, attention and sales are likely to increase.
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