Terms of Amazon's acquisition of Goodreads haven't been disclosed, but that won't stop people from speculating. Bloomberg Businessweek put forward some very sketchy arithmetic that spun the deal into more than $1 billion. Not only is this figure absurd on its face — remember, this was a pretty shocking figure for Facebook's purchase of Instagram at the time, and eventually came down — it requires some pretty hefty leaps of logic. For instance, Pinterest and Twitter are valued at about $50 per user, and Facebook at $58, so Goodreads — a slow-growth network that's hard to monetize in a market with few deep-pocketed buyers — must be worth $55 per user, or $880 million. The author then rounds up, arguing that "any decent I-banker would try to push that valuation." By the way, this would mean that Instagram was actually severely undervalued when it was sold, since it only netted $29 per user, even though both Twitter and Facebook were bidding up the price.
Thankfully, saner voices bearing better information have prevailed. AllThingsD's Kara Swisher has sources close to the deal who say Amazon netted Goodreads for an unspecified mix of cash and stock worth somewhere between $140 and $150 million. In context, Amazon's stock has been trading at record highs, with its current market cap a shade over $121 billion. As for Businessweek's "overly simple, back-of-the-envelope" figure? Swisher's sources say that number is "simply wrong." Goodreads' exit is still remarkable: As much as $10 for each of its users (many of whose accounts are no longer active) and a hefty return on its modest $3 million in funding. No wonder True Ventures' Jon Callaghan, whose company invested in Goodreads, called the purchase a “phenomenal outcome for True” and a “wonderful outcome for all parties.” Even if Goodreads had other interested buyers, $150 million is nothing to sneeze at.