Goodreads is a website that allows users to search an extensive database of books, annotations, and reviews. Goodreads was founded in December 2006 and launched out of beta in January 2007 by Otis and Elizabeth Chandler. Goodreads users have the ability to register books to generate library catalogs and reading lists. Goodreads users can also create groups of book suggestions and discussions. Back in July 2012, Goodreads reported that they had 10 million members, 20 million monthly visitors, and 30 employees. In December 2007, Goodreads raised around $750,000 in angel investment and then they raised $2 million in funding from True Ventures in 2009. Goodreads generated revenue when a user clicked on their website to an online bookseller to make a purchase. Earlier this week, Amazon.com revealed that they have acquired Goodreads.
A couple of years ago, Goodreads acquired a book recommendation engine called Discovereads. Discovereads enabled Goodreads to use “machine learning algorithms to analyze which books people might like.” When a user rated 20 books on a five star scale, the site would start making recommendations. Chandler believed that this rating system would be superior to Amazon.com’s rating system at the time.
Amazon’s acquisition of Goodreads is expected to close by the end of Q2. Goodreads will become Amazon.com’s book-reading social network. Amazon.com may be able to drive more sales by offering special deals to Goodreads users. “Amazon and Goodreads share a passion for reinventing reading. Goodreads has helped change how we discover and discuss books and, with Kindle, Amazon has helped expand reading around the world. In addition, both Amazon and Goodreads have helped thousands of authors reach a wider audience and make a better living at their craft. Together we intend to build many new ways to delight readers and authors alike,” stated Amazon VP of Kindle content Russ Grandinetti.