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As ebooks increase, I personally believe that this type of site will do better - especially when social means are leveraged as opposed to traditional advertising. Other means (print on demand) may well serve these folks better than traditional publishers for that aspect of sales (lulu.com lets them do it all, toss on an isbn and have their stuff sold through amazon and other booksellers who choose to buy the book). Non A/B list authors, even now, get minimal advertising and promotion, and do a lot of that stuff themselves (book signings, self-promotion via press releases, web sites).
I have to admit - I've not seen (noticed may be a better word) an advertisement for a book of any sort in years. I find books through social means (word of mouth, seeing what others are reading, seeking out books in similar genres/series/etc based which usually leads me to user-generated lists on social sites OR the social aspects of commercial sites. And through that, I find a much wider range of books to read (old and new) - many of which aren't available through any local bookstores in an easy way.
While not really applicable (but I feel like blabbing), the pbooks I do buy, I now usually get online (amazon.ca or indigo.ca) as they cost me less (base price, shipping, taxes) than any local stores. I used to feel guilt about doing that - but realized that local shops failed to serve my needs; the staff rarely know the books themselves unless they're on their top 10 wall/new release wall and it takes them far longer to get the books, at higher expense, that I do seek out.
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