July 11, 2006
Book value | A Portland-based website strikes a deal with an online bookseller
By Chris Churchill
On the most recent April Fool's Day, an announcement appeared on LibraryThing.com that was designed to upset the bookish, independent types that frequent the Portland-based website. The message, posted by site founder Tim Spalding, chirpily declared that the networking site had been bought by Wal-Mart.
Predictably, the prank brought howls of protest from bibliophiles upset that the non-commercial site on which users catalogue and compare book collections would be bought ˆ and presumably ruined ˆ by the world's largest retailer. To calm the furor, Spalding quickly assured the site's fans that no such sale had occurred. But within months, a very real purchase announcement appeared on the site, with Spalding revealing in May he had sold a 40% stake in LibraryThing to Abebooks.com, an online book retailer specializing in hard-to-find books.
Again, Spalding, a married 35-year-old who runs the site from a second-floor apartment in the city's Munjoy Hill neighborhood, quickly sought to comfort the devoted among his roughly 35,000 registered users. He assured them that little about the website would change, that the site would remain a community of booklovers and the pressure to buy and sell would remain nominal ˆ despite its affiliation with an online bookseller. He told users, and repeated in a recent interview, that he had not become rich, that Victoria, B.C.-based Abebooks would not have access to private information and that he would remain firmly in control of content. "The site will be able to get better in various ways," he says. "But it's not going to be AbeThing.com."
Spalding declines to say how much Abebooks is investing in LibraryThing, but says the acquisition ensures his site's immediate survival and growth. Proving the point, Spalding says he now plans to double the LibraryThing staff to four and promises technical upgrades. It's clear the acquisition is a step forward for a site Spalding only launched last August, believing its appeal and profitability likely would be modest. "It was really just a personal product," he says. "It sprung from my own interest in books."
But even without ties to a larger business, the site, which allows users to catalogue up to 200 books for free and charges a $10 annual fee for additional books, grew in popularity. To date, 2.7 million books have been listed, with users discovering the communal joys of peeking at somebody else's book collection. It's that remarkably human desire to share information, says David Weinberger, a fellow at the Berkman Center for Internet & Society at Harvard University, that makes the World Wide Web such a fascinating place. "The Web is all about linking," he says. "The urge to share seems to be at the root of what has pushed the Web forward."
Social capital
The partial purchase of LibraryThing comes as interest in so called social-networking sites ˆ sites in which users are invited to share personal information with other users ˆ is at an all-time high. Some of the nation's largest companies are itching to capitalize on a dedicated audience willing to spend many hours on a social site, the kind of brand devotion that corporations crave. Most famously, Rubert Murdoch's News Corp. last July paid a staggering $600 million for MySpace.com, and access to what are now 86 million members.
The partnership between Abebooks and LibraryThing is obviously on a much smaller scale than the MySpace deal, but the motives behind the moves seem similar. And analysts expect to see more of these types of deals in the future. "The loyalty and enjoyment that the social sites possessˆ is partly what justifies the investment," says industry analyst Greg Sterling, founder of Oakland, Calif.-based Sterling Market Intelligence. "If you've got an established community, it's a lot easier to [buy that and] plug that in than it is to build your own community."
So what will Abebooks get from LibraryThing? How does it justify the undisclosed sum it paid? Easily, says company COO Boris Wertz, who sounds almost gleeful at the information contained within LibraryThing. He says Abebooks targets the bibliophile wanting the hard-to-find, often out-of-print tome. But "getting merchandising data for that [subgroup] is very hard," he says. "[Spalding] has built a platform where you can access that data."
For example, LibraryThing has a book-recommendation engine that tells users what books are owned by people with similar literary taste. Link the program on Abebooks, says Wertz, and it could be helpful for the site's customers ˆ and the bookseller. "By getting access to the personal libraries of thousands of people you get an incredible amount of data to help you sell books," he says.
It's not clear, however, that LibraryThing will help Abebooks sell books much on its site, even though Spalding is clearly fond of the bookseller's mentality. ("I ended up talking to every possible buyer," he says, "but I kept on coming back to Abebooks. They were really interested in finding the right deal.") Though the investment means money to hire new programmers and a potential upgrade of its sometimes balky servers, LibraryThing has no plans to make big changes to its small section devoted to book buying. Spalding says a link to Abebooks will continue to sit modestly alongside other online retailers such as Amazon.com. Buying and selling books, he says, "is not what this site is about."
Predictably, the prank brought howls of protest from bibliophiles upset that the non-commercial site on which users catalogue and compare book collections would be bought ˆ and presumably ruined ˆ by the world's largest retailer. To calm the furor, Spalding quickly assured the site's fans that no such sale had occurred. But within months, a very real purchase announcement appeared on the site, with Spalding revealing in May he had sold a 40% stake in LibraryThing to Abebooks.com, an online book retailer specializing in hard-to-find books.
Again, Spalding, a married 35-year-old who runs the site from a second-floor apartment in the city's Munjoy Hill neighborhood, quickly sought to comfort the devoted among his roughly 35,000 registered users. He assured them that little about the website would change, that the site would remain a community of booklovers and the pressure to buy and sell would remain nominal ˆ despite its affiliation with an online bookseller. He told users, and repeated in a recent interview, that he had not become rich, that Victoria, B.C.-based Abebooks would not have access to private information and that he would remain firmly in control of content. "The site will be able to get better in various ways," he says. "But it's not going to be AbeThing.com."
Spalding declines to say how much Abebooks is investing in LibraryThing, but says the acquisition ensures his site's immediate survival and growth. Proving the point, Spalding says he now plans to double the LibraryThing staff to four and promises technical upgrades. It's clear the acquisition is a step forward for a site Spalding only launched last August, believing its appeal and profitability likely would be modest. "It was really just a personal product," he says. "It sprung from my own interest in books."
But even without ties to a larger business, the site, which allows users to catalogue up to 200 books for free and charges a $10 annual fee for additional books, grew in popularity. To date, 2.7 million books have been listed, with users discovering the communal joys of peeking at somebody else's book collection. It's that remarkably human desire to share information, says David Weinberger, a fellow at the Berkman Center for Internet & Society at Harvard University, that makes the World Wide Web such a fascinating place. "The Web is all about linking," he says. "The urge to share seems to be at the root of what has pushed the Web forward."
Social capital
The partial purchase of LibraryThing comes as interest in so called social-networking sites ˆ sites in which users are invited to share personal information with other users ˆ is at an all-time high. Some of the nation's largest companies are itching to capitalize on a dedicated audience willing to spend many hours on a social site, the kind of brand devotion that corporations crave. Most famously, Rubert Murdoch's News Corp. last July paid a staggering $600 million for MySpace.com, and access to what are now 86 million members.
The partnership between Abebooks and LibraryThing is obviously on a much smaller scale than the MySpace deal, but the motives behind the moves seem similar. And analysts expect to see more of these types of deals in the future. "The loyalty and enjoyment that the social sites possessˆ is partly what justifies the investment," says industry analyst Greg Sterling, founder of Oakland, Calif.-based Sterling Market Intelligence. "If you've got an established community, it's a lot easier to [buy that and] plug that in than it is to build your own community."
So what will Abebooks get from LibraryThing? How does it justify the undisclosed sum it paid? Easily, says company COO Boris Wertz, who sounds almost gleeful at the information contained within LibraryThing. He says Abebooks targets the bibliophile wanting the hard-to-find, often out-of-print tome. But "getting merchandising data for that [subgroup] is very hard," he says. "[Spalding] has built a platform where you can access that data."
For example, LibraryThing has a book-recommendation engine that tells users what books are owned by people with similar literary taste. Link the program on Abebooks, says Wertz, and it could be helpful for the site's customers ˆ and the bookseller. "By getting access to the personal libraries of thousands of people you get an incredible amount of data to help you sell books," he says.
It's not clear, however, that LibraryThing will help Abebooks sell books much on its site, even though Spalding is clearly fond of the bookseller's mentality. ("I ended up talking to every possible buyer," he says, "but I kept on coming back to Abebooks. They were really interested in finding the right deal.") Though the investment means money to hire new programmers and a potential upgrade of its sometimes balky servers, LibraryThing has no plans to make big changes to its small section devoted to book buying. Spalding says a link to Abebooks will continue to sit modestly alongside other online retailers such as Amazon.com. Buying and selling books, he says, "is not what this site is about."
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