There's this misconception that Libby and Kobo share the same recommendation engine because they're both under the Rakuten umbrella, but they really don't. Libby pulls from your library's digital collection, which is its biggest limitation and also its charm—you're not getting suggestions based on what you bought, but based on what's actually available for you to borrow for free. It looks at your borrow history, your tags, and what you've placed on hold. I've noticed it leans heavily on genre patterns; if you check out three true crime books in a row, suddenly the 'For You' shelf is all unsolved mysteries and forensic memoirs. But it feels a bit surface-level compared to something like Amazon's algorithm. You won't get deep, 'if you liked this specific narrative technique...' suggestions. It's more about broad categorization.
Kobo, on the other hand, feels much more integrated with your actual reading behavior on the device. It tracks not just what you buy, but how fast you read, when you typically read, if you finish books or abandon them, and even the highlights you make. I switched from a Kindle last year, and the 'Reading Stats' and 'Suggested Reads' on the Kobo home screen became surprisingly accurate after a few months. It started suggesting darker literary fiction after I powered through a couple of dense, bleak novels, while Libby was still offering me more popular bestsellers in the same general genre. Kobo's recommendations seem to have a longer memory, too. The downside is it's definitely nudging you toward their store and Kobo Plus titles, so there's a commercial layer Libby doesn't have.
Honestly, the personalization feels most potent when you use them together, but they operate in totally different lanes. Libby manages my 'what can I get now' curiosity, while Kobo slowly learns my deeper tastes for when I'm ready to spend.