Did Amazon’s Purchase of Goodreads Come At Apple’s Expense?

The announcement that Amazon (NASDAQ:AMZN) made in March that the retailer purchased Goodreads, the e-reader program with a social network layer, was not terribly surprising, but rather a perfectly sensible move given that company’s core business (at least at one point) was books and e-readers. Now that what little dust that was kicked up has cleared, there is another very telling detail that has emerged from Amazon’s acquisition: the purchase put a huge wall between a potential partnership between Goodreads, and Apple (NASDAQ:AAPL).

Reportedly, Apple was in discussions with Goodreads about integrating the reading service’s model, putting the ability for users to rate and share books on Apple’s iBookstore. If this sounds familiar, it may be because Apple made a similar integration of the movie rating site Rotten Tomatoes into its iTunes video library. According to the Wall Street Journal, sources indicated that the talks had not progressed much — but Amazon’s acquisition ensured they wouldn’t pick up again, either.

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The same sources said that Apple iTunes officials were quite taken aback when Goodreads executives went silent in the March time frame, after efforts to resume talks were made. As it turned out, Amazon had moved into Apple’s seat, and made the ultimate offer for the company, which it took on the condition that it was to cut off ties with other suitors.

As the WSJ indicates, the Goodreads situation is a prime example of how companies industry-wide — not just Apple and Amazon — are competing tooth and nail for online real estate, as consumers shift attention from brick and mortar (or paperback and hardcover, in this case) to web-based alternatives. Amazon in particular has been investing tremendous amounts of money into its online portfolio, from everything like a Netflix (NASDAQ:NFLX)-style streaming service to its AmazonMP3 music store, which has been steadily been gaining traction in the market, at iTunes’ expense.

With the saturation of tablet PCs, online services like iBookstore are becoming integral parts of commerce, and companies are scrambling to jump on the market that is only a couple of years old.

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