Evan Schnittman of the Oxford University Press blog recently featured this post about the current state and future of book publishing. He talks about three important reasons why the book publishing industry finds itself in a very favorable position with some of the world's largest technology companies: discoverability, print on demand (POD) and deep repositories of content.
On the discoverability front, Schnittman talks about the ongoing battle for search supremacy between Google and Microsoft. It doesn't seem like a fair fight given Google's dominance, but at least that hasn't stopped Microsoft from trying (e.g., Live Search Books). Improving the book search and discovery experience probably isn't anywhere near the top on either company's priority list but it's been fun watching each one try to leapfrog the other with new features. New features likely lead to more exposure and discoverability, both of which are important in the content world...assuming this all leads to new revenue streams in the form of book sales or advertising income.
Schnittman's comments about POD are valid, but I still think the dramatic change to this playing field won't happen till POD equipment is cheap enough to sit in the back room of your local bookstore. The value of POD isn't that significant if you still have to wait a day or two for your book; instant gratification could be POD's "killer application" and help level the scales between online and brick-and-mortar stores.