What happens when Google pulls the plug

Book learning: Tony Nash faces the challenge of replacing Google. Rob Homer

Software developer Tony Nash used his day job heading a web marketing company to build his own thriving online book retailer. But a recent change to Google’s e-book retailing business will give him a fresh set of challenges.

In Christmas 2003, he was wrapping up another year as the head of a web marketing business. The company had just completed a major job increasing traffic to the website of book retailer Angus & Robertson. Nash had been surprised when he took on the job to find the bookseller outsourced its website to a third-party online book distributor, SeekMedia.

Nash spotted a business opportunity.

“I remember saying to my brother, ‘I wouldn’t mind giving that a go’,” he says.

Online book retailer Booktopia was launched six weeks later, with SeekMedia taking care of the back-end and book distribution.

The site took its first order within three days and had turned over $30,000 within four months. Nine years on, the web marketing business is long gone, and Booktopia is Nash’s sole focus.

The company has made BRW’s Fast 100 three years in a row, with a growth rate of 50.8 per cent and a turnover of $14.2 million in 2010-2011. It is likely to make the list again this year, with revenue for 2011-2012 on track to surpass $21 million.

Nash attributes the early success of the business to his command of search engine optimisation (SEO), the trade he had been plying as head of the web marketing company.

“I was able to get the best out of the system,” he says.

“The [Booktopia] website made us scrutinise what worked and what didn’t. I started looking at customers’ websites in the same way I was looking at my own and asking the same tough questions.”

The company parted ways with SeekMedia in 2007 when it chose to vertically integrate the business.

“The publishers had never heard of us,” Nash says. “They would only give us standard discounts and trading terms, so we figured we would have to be the model customer so they’d take notice.”

This meant only ordering stock that was needed and being diligent with payment. Taking on a warehouse manager who was experienced in book distribution also helped.

Booktopia now deals with publishers directly to obtain books that it distributes from its warehouse in the Sydney suburb of Lane Cove.

But the advent of e-books has been a game changer.

Nash remembers sitting in a crowded exhibition hall in Los Angeles in December 2008, watching Amazon founder Jeff Bezos introduce the Kindle to the world.

He initially walked out of the seminar “shattered”, believing that e-books spelt the end of his business.

His concern was short-lived.

“I got halfway down the hall and thought, ‘the Koreans, Taiwanese and Chinese are going to copy [the Kindle] and the publishers won’t want to deal [exclusively] with Amazon … no worries.”

Booktopia partnered Google books in 2010, which launched it into the e-book market. The decision to align with Google was based on the superiority of its technical platform. Nash concedes there was also a certain comfort factor in pairing with a company the team knew well. Nash and his team had worked closely with Google during their early days as web marketers.

“We had already done so much with them ... ad words, SEO – they were integral to our success, so we knew they were the right partner,” he says.

As a product, e-books make up just 2 per cent of the company’s sales revenue. But Nash says it’s a critical segment to be in. This is why Google’s recent announcement to wind up its agreements with third party e-book retailers such as Booktopia came as a blow to the company.

“We have a call centre of nine people all trained to deal with different e-readers, we had the resources dedicated to a good job,” he says.

“And then on April 4 they call us to say that they’re stopping the retail program, which was a real shock.”

The retail partnership with Google will end in January 2013. Nash is already in talks with several suppliers and is confident that Booktopia will come up with a solution.

Nash takes the uncertainty in his stride. “I’m an entrepreneur, I deal with stuff like this all the time.”

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