Reading their Way to dot.com Profits

Abebooks.com has acquired the Berkeley-based BookFinder.com, a free Internet web service for finding and buying new and used books.

Launched as a final project for a class at UC Berkeley, BookFinder.com will remain independently operated by Anirvan Chatterjee and Charlie Hsu, two self-described “High Tech Book Geeks.”

Both companies were initially developed in 1996, and their dealings grew out of a long shared history and mutual interest. BookFinder has as customers Internet giants like Amazon.com and Barnes & Noble. They also support independent booksellers by compiling a massive clearinghouse of titles from member stores.

BookFinder.com searches well over 100,000 different booksellers, with a combined inventory of over 100 million books in stock. The vast majority of sellers are small independents, individuals and community-based sellers in more than 50 countries.

Because both companies are privately held, no value has been released on the deal. Forbes magazine estimated Bookfinder.com had revenues of $8 million in 2000, with Internet advertising on their site contributing up to 30 percent of revenue. The advertising is sold through third-party brokers. Some income also comes from larger booksellers, who pay to reach more customers.

BookFinders.com has online marketing relationships with a number of major book chains and online retailers, including A1Books, Alibris, Amazon.com, BarnesandNoble.com, Biblio.com, Buy.com, Chapters.indigo.ca, the International League of Antiquarian Booksellers, Overstock.com and Powell’s Books.

“For every $10 book purchased through our search site, we get something like 50 cents,” Hsu explains. Abebooks’ customers collectively are said to buy about 20,000 books a day.

At age 19, Chatterjee first put his project online after he got an “A” for his information systems course. He found himself pursuing the project outside the classroom, re-launching it as a comparative shopping engine in 1999. “I worked with Charlie, who helped me build a 486 computer server from parts. We put a copy of BookFinder.com up online in January 1997, and people started using it.” Word spread among booksellers and traders, building a niche among those seeking rare and out-of-print titles.

“Charlie and I have worked on a lot of projects together over the years, publishing zines and photographing subway stations. But we always gravitated back to books and technology,” Chatterjee says.

“I really liked reading books, I enjoyed finding books online,” says Chatterjee. “I read about 100 books a year. After a while it was kind of word-of-mouth.” Hsu, who had once worked as a library shelver, finished his computer science degree at UC Davis and joined Chatterjee.

While it was difficult to explain to their parents what they do, Hsu compared it to “real estate agents or yellow pages cataloguers.”

At one point, Chatterjee applied to graduate school and started pursuing his master’s degree at Berkeley’s School of Information Management and Systems. To his parents’ disappointment, he took a leave of absence after one year, though he plans to return. Meanwhile, Hsu says, “My parents still ask me: ‘Are you going to go to grad school now?’ In the future I kind of still want to.”

As an independent subsidiary of Abebooks, BookFinder.com will gain access to the resources and expertise of the much larger, internationally known company, posing possibilities for international expansion.

“We’re looking at expansion around the world. We’ve always been very internationally focused. Some of it actually comes from the fact that we’re immigrant kids. You know, Charlie’s from Taiwan, my parents were from India. We grew up in households where multiple languages were spoken and multiple languages were read,” Chatterjee says.

And what about Asian languages? “I’d love to do it but you have to keep an eye on the Asian market,” says Hsu, who learned about business in watching his parents run a cafeteria, and his father working as a contractor in housing construction. “They’re getting there, but they’re still developing. You have to keep an eye on when’s a good time to move in. At the moment it’s not.”

Although Japan and Korea already have large Internet communities, part of the puzzle is paying attention to what happens in places like China and India. Obstacles include the great digital divide, as well as issues like reliability of postage and delivery of packages. “It takes a while to educate booksellers on using the Internet,” Hsu adds.

BookFinder.com

Founders: Anirvan Chatterjee and Charlie Hsu

Employees: A friend, Wendy, works part-time in research and customer support. Consultants help the two founders as needed.

Achievements: Developed the whole backend technology, creating a different kind of comparison shopping search engine. Created a particular type of book-clustering technology that’s proprietary software. In 2001, they launched multilingual book-search system.

Philosophy: ?Do the right thing,? look at what’s right for the customer and think about how we would like to be treated.