A while ago, Neil Gershenfeld gave a talk at amazon about technologies coming down the pipeline. He talked about being able to download blueprints to a home 'printer' and have it 'print out' a working bicycle.
Why is that revolutionary? Well first, there's the obvious cutting of shipment costs. More importantly, by totally changing the cost structure of goods delivery, it removes a lot of traditional Economies of Scale, thus lowering the barrier-to-entry for a new 'producer' (designer might be a better word) in the market. The producer is now free to experiment and customize since the cost of a 'failed' product is only the time lost in the effort.
Thinking about things like that makes one rethink where exactly a company like amazon fits into the market. Though we're not quite there yet (no instantly downloadable bicycles), lulu.com is a company that allows people to upload books in digital format. You can then sell your book (as a physical book, not a download) on sites like amazon. Pretty darn cool, if you ask me. Now that publishers are removed from the equation, the barrier-to-entry for an author is significantly lowered. The up-front costs to them are minimal, and the cost of selling zero copies of your book is just the time you spent writing the book; not the cost of hundreds of unsold printed-and-bound physical books.
Most people aren't ready to read books in digital format (I know I hate reading long articles on my laptop), which has also limited how Long the Tail is for books (the first limiting factor being the barrier-to-entry for authors described above). Lulu has just lengthened the tail for books by changing their cost-structure. Additionally, by allowing self-published books to be sold on amazon, lulu.com is addressing the issue that customers face as they wade through the Long Tail: "how to sort through the junk and find the Good Stuff?" Through its personalization and recommendation features, Amazon has made a name for itself in helping people find and discover items. Lulu is smart to leverage that.
(tip from tpwire)
update a little more reading revealed that amazon hasa acquired booksurge, a similar company.