) has announced that it will acquire Goodreads, a book
recommendation site that helps its readers to find and share
books of their choice, for an undisclosed sum.
Launched in Jan 2007 by Otis Chandler and Elizabeth Chandler,
Goodreads allows users to freely search for books and other
reading materials. It allows users to add books to their shelves
and also write reviews. It enjoys a steady following on social
networking sites such as Twitter, Pinterest, Facebook and others.
Currently, it has 16 million members with 525 million books added
to their shelves and 23 million reviews written to date (as
mentioned on the website).
Goodreads brings a platform that will help Amazon understand
what readers like to read, which could further help its
book-selling business. The acquisition will not only reduce
competition for Amazon but also diversify and expand its
The coming together of these two entities will provide both
authors and readers a broader platform. Amazon, on its part, can
extend the Goodreads experience to millions of readers through
its Kindle platform.
As per a report by IDC, Apple is leading the tablet market
with 43.6% market share followed by Samsung at 15.1%. Amazon's
Kindle Fire still remains far behind at 11.5%. However, unlike
the other players, Amazon is primarily a retailer, so its focus
is more on selling goods. Therefore, the importance of its Kindle
tablet is as a platform for these sales. In this respect, it is
worth noting that Amazon does have a Kindle app to sell books on
hardware produced by others. If the app offers more, it could
retain its position as the leading book seller.
Amazon is one of the leading players in the extremely
fast-growing retail e-commerce market. Of course, competition
Barnes & Noble, Inc.
) remains as strong as ever. While the strong growth prospects
are making the market more competitive by the day, Amazon
continues to maintain and even grow its share on the back of its
consistent and reliable service. Amazon's scale of offerings, its
broad reach and platform approach are the keys to its
In the fourth quarter of fiscal 2012, Amazon reported revenues
of $21.3 billion, up 54.0% sequentially and 22.0% from the
year-ago quarter. This was within the guidance of $20.3-22.8
billion (up 55.7% sequentially and 23.3% year over year at the
mid-point), although short of our expectations. Year-over-year
revenue growth was 23% excluding unfavorable currency impact.
Amazon has a Zacks Rank #3 (Hold).
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