Exit strategies

So, Amazon bought Goodreads last week. You probably know that already. After the announcement, there was an immediate, mostly negative reaction, followed by some pushback from folks who asked variations on "What did you think was going to happen?"

One of the better "What's the big deal?" responses came from Dan Blank, who works with authors to improve the visibility of their work. Via Twitter, he shared his day-later assessment of the social-media-fueled reaction: "A small number of people paying very high rent freaked out about a multi-billion $ co buying a multi-million $ co."

So, I'm not a Goodreads fanatic, and I am not reflexively an Amazon basher. But (with a tip of the hat to Dan), I do think the acquisition matters, a lot.

There are two reasons. The first is one I've touched upon before: digital choke points. There are five companies currently fighting to own our digital lives. They are well-known: Amazon, Apple, Facebook, Google and Microsoft.

Increasingly, access to content, reviews and distribution is in the hands of this small number of firms. They don't play nice with one another, and they are prone to be lobbied. Look at the number of takedown requests that Google is fielding each month. There's no legal process in place there. It just happens.

I'm not immediately leaping from "could happen" to "will happen", but there are enough examples (Amazon deleting what it sees as an unauthorized account; the 1984 clawback) to make you think twice before deciding all is well in online bookselling. Think about how hard Smashwords had to work to restore its access to Paypal when the banking vendor took exception to what it decided was objectionable content.

The other reason is less visible, but it is aptly offered by James McQuivey and Nate Hoffelder: "There's a reason that nobody in publishing bought Goodreads". With strong allegiance to a trade publishing model, publishers didn't understand or value Goodreads and its commitment to readers.

McQuivey points out that any publisher could have bought Goodreads on the cheap while it was growing, but none did. Hoffelder uses Bookish, a living example of what should have been a reader-facing publisher initiative, to make the point that any publisher that bought Goodreads likely would have managed it to an early demise.

It's hard work starting a business whose underlying premise disrupts the one that made you successful. Building a new business model takes planning and patience. From the outset, Indigo segregated Kobo, ultimately selling the business when its capital requirements outstripped Indigo's ability to sustain the business.

Much has been made of Goodreads and its Amazon-sponsored exit strategy. The folks who founded and grew Goodreads took a risk, and they have been rewarded.

As McQuivey notes, publishers had a chance to be part of that. For a mix of reasons, they chose to pursue different paths.

They may have felt that their own initiatives could help forestall disruption, but I think that's not the case. As Amazon expands, traditional publishers may soon be considering their own exit strategies.

Brian O'Leary

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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