By: Gigaom
Sainsbury supermarket buys HMV’s aNobii stake to enter e-books
Social book discovery startup was left divorced from its intended book retail partner after HMV jettisoned Waterstones. Now its future lays with a supermarket, not a traditional book store.

Fresh from buying white label digital entertainment vendor Global Media Vault in October to power its new launch in to online content retailing, the UK supermarket chain J. Sainsbury is now moving in to e-books.

It is buying a 64 percent stake, mostly from HMV, in aNobii, a social discovery web engine for books that is otherwise owned by three book publishers themselves.

HMV bought a 45.4 percent aNobii stake for £2.1 million ($3.25 million) last year, according to its accounts. Together with digital music retailer 7digital, HMV made a £1 million annual loss from its two digital investments last year.

Sainsbury’s acquisition is for just £1. aNobii’s potential usefulness to HMV was cut short when the latter sold its Waterstones book chain, which had planned to work with aNobii, to alleviate worries around its core music and video entertainment business last year.

Sainsbury’s is racing off against Tesco, which also has launched an e-books store and which bought 80 percent of Blinkbox to move in to on-demand movies. Each also offers digital music downloads.

The supermarkets are powerful in physical book retail, but they are bolstering to have a digital business model, for the day when physical books have waned and Amazon is left the uber-dominant e-book retailer.

aNobii was built in Hong Kong in 2006 as a place for book consumers to share their reading preferences. But it took investment from the publishers HarperCollins, Penguin and Random House along with HMV, who want to use it to sell e-books directly to consumers in a bid to fend off Amazon’s growing dominance. Former Livestation CEO Matteo Berlucchi came aboard as founding CEO.

The service includes discovery features including ratings, rankings and user-curated book topics that can be “followed” as though they were Twitter lists. The publishers want to use aNobii’s consumer data to better plan and respond to readers’ emerging likes and dislikes.

But the real big new idea is retail. From its website, aNobii users can download free Project Gutenberg and buy 100,000 pay-for titles from over 15 publishers, available for reading in aNobii’s own e-reader app on iPad and, soon, other devices.

That makes aNobii a budding social discovery engine, with retail tacked on. And it is bringing that store in to Facebook, too.

Under new ownership, Waterstones has no plans to engage with aNobii – something which left aNobii unable to draw on the once-mighty UK bookseller’s heft. In fact, Waterstones last month committed to retail Amazon’s Kindle in stores.

“This acquisition is a valuable addition to our digital portfolio and shows our commitment to becoming a key player in the digital entertainment market,” says Sainsbury’s digital entertainment head Mark Bennett (via release).

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