I came across an interesting blog post from Tim O'Rielly, which I just had to share.  It covers the Amazon purchase of Shelfari in a whole new way.

Social Networking for Books: One Ring, or Loosely Joined?

I have to confess that one of the social networking tools I find most valuable is Goodreads. (It's a close second to Twitter, and way ahead of Facebook, Friendfeed, or Dopplr.) Unlike twitter, where I follow hundreds of people (possible because of twitter's minimalism) and am followed by thousands, on Goodreads, I follow and am followed by a small circle of friends and people whose taste in books I trust. As someone who loves books, it is the pinnacle of private social networking for me.

So it was with some interest that I read about Amazon's acquisition of Shelfari. Much of the resulting commentary has focused on the problems this poses for LibraryThing, in which Amazon also has an invesment (via their recent purchase of Abebooks.) I'm a bit surprised that the articles have seemingly ignored the fact that Goodreads appears to be the market leader, at least based on data from compete.com.

Of course, that could change quickly if Amazon throws their muscle behind Shelfari and integrates it into their overall service. And there's the rub: we're entering a period of Web 2.0 consolidation. After all, web 2.0 is all about network effects in applications that get better the more people use them. And that means that companies with dominant share tend to get more dominant over time; that dominance need not be organic to start with (though it helps.) Over time, I expect to see companies who've achieved dominant market share in one market segment to use it to dominate a related segment.