Readmill Could be Amazon’s Next Acquisition Target
The mobile reading app Readmill is back in the news again today with a new retail partner, and it’s going to make them an even more tempting prize for Amazon.
Readmill has signed a deal with Penguin UK so that customers of the Penguin UK ebookstore can quickly and easily send their purchases to Readmill, and then read the ebooks in the Readmill apps for Android, iPad, and iPhone.
In the near future that ebookstore will be updated with new "Send to Readmill" buttons on the download page, removing yet another speed bump that has made it difficult for readers to concentrate all of their ebook purchases in one location.
Penguin UK is something like the 70th retailer to sign up with Readmill since it launched 2 years ago. Readmill’s partners are a motley bunch of companies including ebookstores like eBookmall, publishers like Wizard Tower Press, and even self-pub services like Bibliocrunch. All of these sites sell or give away ebooks (including DRMed ebooks), and they have all elected to help their customers use Readmill.
As a result Readmill is becoming a focal point in a growing decentralized network of indies, and that is going to make Readmill a worthwhile acquisition for Amazon. (And the fact that Readmill’s revenues are based on tracking their user’s reading behavior and selling the data doesn’t hurt either.)
Amazon has a policy of trying to buy any of their smaller competitors before they can grow into a serious threat. That’s why Amazon owns Zappos, Diapers.com, and The Book Depository (3 niche retailers that were beating Amazon in their niches), and at some point Amazon is probably going to apply the policy to ebooks – if they haven’t already done so.
Edit: I was just reminded on Twitter that Amazon has already bought ebook competitors – remember Stanza?
Now, if you’re thinking that Amazon’s only competitors are the big ebookstores then it’s time to start thinking laterally.
For one thing Amazon would probably never be allowed to buy a major competing ebookstore (the SEC wouldn’t allow it). And for another the major publishers are never going to let a single major ebookstore grow up and replace Amazon; they would be replacing one ruthless behemoth with another.
In short, the only competition Amazon could be interested in buying would be one or another indie startup.
This opinion was inspired by a comment left yesterday on a post about breaking Amazon’s monopoly (such as it were). David Haywood Young argued that centralized systems (like Amazon) could be taken down by a network of indies:
There’s no obvious reason these centralized systems have to dominate internet sales at all. Set up an easy-to-use system for content owners to offer their wares from wherever they choose to host ‘em, and handle sales by at least one common protocol, and the only central system of use will be an index…which will really only be useful to most insofar as it is also a recommendation engine.
If we expand upon that idea, this indie network could include independent startups that each specialized in one or more task: production, distribution, payment processing, marketing, reading, or discovery. Rather than trying to do everything and failing to do any one task well (like Kobo, B&N, Google), each startup would try to be the best at just one task. Customers and creators would ideally be able to navigate the network seamlessly, with much of the work done automatically behind the scenes.
Now, this indie network doesn’t really exist yet; it’s more of a concept than any type of actual coordinated effort to grow the ebook market. But it could exist, and they way that Amazon is acquiring startups will work to either control it or at least control the most important parts.
Amazon is going to want to look for the startups that are becoming the major nodes in the indie network, and then try to buy them. Readmill could be on its way to becoming one of these nodes; they already have dozens and dozens of connections, so if Amazon bought them then Amazon would be in the middle of everything.
Do you know another company that was already on its way to becoming a major node?
Goodreads.
This book community had developed expertise in book discovery. They had invested in a discovery engine, and by encouraging users to assemble their own virtual bookshelves Goodreads had also managed to introduce an organic discovery component.
That’s why Amazon bought Goodreads earlier this year, and for a similar reason I think Amazon is probably looking at Readmill.
Thoughts?
P.S. I would also add Smashwords to the list of potential nodes, but it isn’t one yet. At this point Smashwords has only the most tenuous connections to ebook production services, and their ebookstore is too focused on their own website (it can’t be embedded in author websites, for example). Right now Smashwords is a major node in a network with major ebookstores, and not an indie network. But Smashwords could also become a node in that indie network if they tried.
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