If Amazon’s motivation to acquire Goodreads could be summed up on a book jacket, it might be with these words: The data could overflow a library.
Few would disagree. Within a day of Amazon.com’s announcement that it would acquire Goodreads, a social platform for book lovers, the pundits were rushing to post their own reviews of the merger. Some describe it as a loss of independence for Goodreads, others as an opportunity for Amazon to engage readers with interactive reviews, rather than the static ones traditionally on its site.
But one of the most spot-on items I read was in Salon.com, with the headline, “Amazon buys Goodreads: We’re all just data now.” Among the observations is that Amazon, by acquiring Goodreads, will inherit staggering amounts of consumer information.
“It is naïve to believe that Otis Chandler, the affable co-founder of Goodreads, didn’t realize very quickly the value of the beautiful data universe he created,” writer Rob Spillman states. He adds: “The acquisition, from a pure business point of view, is simply brilliant . . . Amazon is a step ahead of their competition.”
The column has a valid point. Goodreads counts 16 million active members, adding more than four books per second to their “want to read” lists over the last month and a half, according to a story in AdWeek. Amazon knows that whoever owns the data is poised to make the smartest product recommendations. This may be why Facebook, too, has been examining books as the next form of shareable content.
But Amazon, in the Goodreads deal, also inherited millions of wary Goodreads members. Some are considering canceling their accounts, and others have, due to worries about how Amazon will use their personal data.
Amazon will determine the next chapter in this relationship. The online retailer has proven to be an impressive operator, and it has demonstrated that it can be a master at effective data use, sending members relevant product recommendations based on previous searches.
If it were my merger, I’d get out in front of it — I’d reach out to every Goodreads member and share details, perhaps an FAQ, about what information I planned to collect, why, and how I intend to use it. I’d also consider giving members the chance to opt-in to the kinds of data they would like to share, as do other online entities including Facebook.
Amazon’s acquisition of Goodreads has yet to play out, but millions of consumers are watching closely. If it manages the data acquisition in an open, consumer-friendly way, it could lead to a pretty good story.
