Next: Social publishing?

Publishers have been making a great living for many years from using the key access they had to a crucial part of the publishing system: The exposure of books to customers. As long as books had a physical extension, the production of books required money - but like all industries based on mass production, you could start small and grow. Many people think that mass production requires you to start by producing millions of items from the start, but that is not how it works. The publishing industry has always been set up to scale. You can start with producing only a few hundred copies, and if they sell well, print more - and more as they sell. But you do not have to print all of the copies from the start, any mode than you have to produce a million automobiles on day 1. It is an incremental business.
Which means the crucial part is access to the distribution. Well, having a great product helps, too - it will not sell if it is not good. And having distribution means access to customers. There was a time when people interested in buying books would go to a bookstore. That time is long gone, even if some people still do (and bookstores nowadays offer the best coffee around).
But distribution has become electronic, and if you want to find a way to sell books, you have to find a place where people meet online. You would probably say that you should go to Amazon. But while Amazon was set up to facilitate the distribution of books by connecting to the Ingram book catalog, they then turned into a generic distribution system. Amazon is now a logistics company, no longer a bookstore (if they ever were one). But the customers do not know that. They think they are buying books.
This is why the social networking possibilities in Amazon are so ridiculous. They know that the margins of book sales are low, and they have tried to get into the publishing business - offering authors exclusive Kindle deals, helping agents bypass traditional publishers - but it is all distribution driven. Which is ironic, because when they created the Kindle, they disintermediated themselves.
What characterizes book buyers? Well, they are booking for information, for one thing; unless they are looking for entertainment. Sometimes both in one package.
It has already started to happen in entertainment-oriented publishing. The readers get together and discuss new books, which they find on the Kindle. It may not be good litterature, but if you are looking for entertainment for a couple of hours, then it is probably worth 99 cent.
But the key is the access of readers to each other. And this happens in other ways than those controlled by Amazon. But since it is so easy to publish books now, then those venues where readers meet should go into publishing. It may not be so surprising that Facebook bought one of the most innovative book publishing platforms in many years; even if they say it was to access the engineers. I wonder.