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They're saying that goodreads became an alternate front end to amazon for finding books but users used amazon (via affiliate links) to actually buy the book. G

They're saying that goodreads became an alternate front end to amazon for finding books but users used amazon (via affiliate links) to actually buy the book. Goodreads was better at helping users find new books they wanted than amazon themselves and so it made sense for amazon to buy them.

chrisseaton 6y ago
> Goodreads was better at helping users find new books they wanted than amazon themselves and so it made sense for amazon to buy them. I still don’t get it - people were already finding books on Goodreads and buying them on Amazon... so why did Amazon need to buy them? Why pay for it if it’s already working for you? And why pay a referral fee if people already want to ignore other options and go to Amazon to buy after finding on Goodreads?
- Abhinav2000 6y ago
  Because they had to pay goodreads a commission each time (say 5% —> i’m completely making this number up and its probably a lot lower). So if 70% of goodreads profit is from Amazon, amazon figured they could just buy them since the cost of running goodreads is a lot lower than the commissions it makes so amazon was basically paying them anyway. better (in their view at the time) to just pay goodreads one off and buy the company than to pay each year in perpuity. depends on the price they bought it at
  - chrisseaton 6y ago
    > Because they had to pay goodreads a commission each time But why were they doing that? "the vast majority of internet users were hooked on Amazon" so they were buying through Amazon anyway.
    - jpindar 6y ago
      The users were hooked on buying from Amazon. But they were following the affiliate links from Goodreads to get to Amazon.
- Mediterraneo10 6y ago
  > And why pay a referral fee if people already want to ignore other options and go to Amazon to buy after finding on Goodreads? Because if Amazon stopped paying those referral fees, then the website can stop posting links to Amazon, and instead post links solely to Amazon's competitors. Yes, people are hooked on Amazon and so even in the absence of a direct link they might browse over to Amazon and search for the product there, but that introduces a lot of friction and so Amazon would lose some business.
- frosted-flakes 6y ago
  Amazon's referral program is open to everybody to use. How could Amazon restrict GoodReads from being a part of it?
  - chrisseaton 6y ago
    > How could Amazon restrict GoodReads from being a part of it? By just kicking them off the programme? You don't have a legal right to be part of a referral programme.
    - dageshi 6y ago
      Amazon would be moronic to do such a thing. Goodreads could've turned around and begun selling books direct, they had the customers buying intent, not amazon. Other sites would've seen this move and begun to pivot away from amazon's affiliate system for fear of the rug being pulled out from underneath them.
  - jpindar 6y ago
    By offering them a lot of money - i.e. buying them.
- prepend 6y ago
  I think the book reading data was good for amazon to use to sell more books. Goodreads’ privacy policy prevented them from selling the data to Amazon, but if Amazon pwned Goodreads then they could use the data in compliance.

chrisseaton 6y ago

> Goodreads was better at helping users find new books they wanted than amazon themselves and so it made sense for amazon to buy them. I still don’t get it - people were already finding books on Goodreads and buying them on Amazon... so why did Amazon need to buy them? Why pay for it if it’s already working for you? And why pay a referral fee if people already want to ignore other options and go to Amazon to buy after finding on Goodreads?

Abhinav2000 6y ago
Because they had to pay goodreads a commission each time (say 5% —> i’m completely making this number up and its probably a lot lower). So if 70% of goodreads profit is from Amazon, amazon figured they could just buy them since the cost of running goodreads is a lot lower than the commissions it makes so amazon was basically paying them anyway. better (in their view at the time) to just pay goodreads one off and buy the company than to pay each year in perpuity. depends on the price they bought it at
- chrisseaton 6y ago
  > Because they had to pay goodreads a commission each time But why were they doing that? "the vast majority of internet users were hooked on Amazon" so they were buying through Amazon anyway.
  - jpindar 6y ago
    The users were hooked on buying from Amazon. But they were following the affiliate links from Goodreads to get to Amazon.
Mediterraneo10 6y ago
> And why pay a referral fee if people already want to ignore other options and go to Amazon to buy after finding on Goodreads? Because if Amazon stopped paying those referral fees, then the website can stop posting links to Amazon, and instead post links solely to Amazon's competitors. Yes, people are hooked on Amazon and so even in the absence of a direct link they might browse over to Amazon and search for the product there, but that introduces a lot of friction and so Amazon would lose some business.
frosted-flakes 6y ago
Amazon's referral program is open to everybody to use. How could Amazon restrict GoodReads from being a part of it?
- chrisseaton 6y ago
  > How could Amazon restrict GoodReads from being a part of it? By just kicking them off the programme? You don't have a legal right to be part of a referral programme.
  - dageshi 6y ago
    Amazon would be moronic to do such a thing. Goodreads could've turned around and begun selling books direct, they had the customers buying intent, not amazon. Other sites would've seen this move and begun to pivot away from amazon's affiliate system for fear of the rug being pulled out from underneath them.
- jpindar 6y ago
  By offering them a lot of money - i.e. buying them.
prepend 6y ago
I think the book reading data was good for amazon to use to sell more books. Goodreads’ privacy policy prevented them from selling the data to Amazon, but if Amazon pwned Goodreads then they could use the data in compliance.