Blurb has had a good amount of success as a disruptive player in the “traditional” publishing space. The San Francisco-based company, which lets anyone write and publish a physical book at relatively affordable prices, has built a profitable business with more than 100 staff and more than a million paying customers since it launched to the public six years ago. But according to founder and CEO Eileen Gittins, Blurb wants more.

Blurb is expanding into the e-book space this summer, gradually rolling out a software platform developed in-house that will allow people to create and distribute multimedia-enabled digital books. So why is Blurb going into an industry in which even huge, established publishing players have notoriously had serious difficulties making money, when its own core business has already been doing so well? Gittins came by TechCrunch TV this past week to explain the strategy.

You can watch our full interview in the video embedded above, which I would recommend because Gittins is very engaging, but here are some topics we covered:

The e-Book ‘Beginner’s Mind’

Although Blurb has been making physical books since 2006, the company knew from day one that it could very well move into the digital form factor, Gittins said. “When we named the company Blurb, we didn’t name it ‘book’ anything, and we didn’t name it ‘publishing’ anything, because we knew that the form factor that books would take would be changing. We didn’t want the burden of what people thought of as a book to be what they thought of when they thought of Blurb.”

But while Blurb has always aimed to shake up publishing, it has also taken great care to not hire executives or employees that built careers in the publishing industry. Nearly all of its staff comes from the tech space, Gittins said. This is so that any dogma that may have held back publishing companies from benefiting from the increasing emergence of tech in recent years won’t weigh down Blurb, which aims to enter into the e-book industry “with a child’s mind.”

The Cost Of The ‘Star Author’

A big reason that traditional publishers have been squeezed in e-books is because they still create the books in a way that comes along with huge expenses, Gittins said. Blurb is a more direct from artist-to-consumer model, so those roadblocks aren’t in place.

“In the traditional publishing business, the author is at the end of the food chain… there are all these costs associated with editorial, and marketing, and distribution, and warehousing, and printing. And you get into a retail environment like a bookstore, and they want to take 50 percent,” Gittins said.

She went on to say that in the e-book model, traditional publishers “still do all the work of finding that next great project,” Gittins said. “It’s more of a Hollywood, blockbuster business. They have to bank on the next Pirates of the Caribbean 7, they have to bank on a Johnny Depp. They can’t bank on the smaller guys who are up-and-coming authors, who are mid-list authors. With Blurb, we don’t have that problem.”

Blurb’s IPO and M&A Options

With profitable operations and growing revenue, it’s no surprise that Blurb, which has taken on $19 million in venture capital, has seen some approaches from potential acquirers.

“We’ve been approached by several large public companies. They haven’t been the right ones, [but] we’re open to that. Listen: We’re a VC-backed company. We’re open to the exit, we just want a great one,” Gittins said. “But we’re also reaching the stage of a company where, in terms of revenues… we’re approaching that size where an IPO is absolutely a possibility. So it could go either way.”

Blurb, a startup that lets you create customized books, is launching a new integration today that allows you to create professional-looking photo books of all of your Instagram photos.

Blurb says the integration creates professional quality images and printing as the company automatically increases the resolution of Instagram camera phone images to ensure they will print properly. You can choose from a variety of sizing, paper types and formats, with pricing starting at under $11.

To create a book, users can sign into their Instagram account on Blrub. The most popular image, based on the number of Instagram “likes,” is added to the cover. The most recent photos are then autoflowed into a book that can be previewed and purchased or edited using Blurb’s online bookmaking tool, Bookify.

Instagram has been on a roll. The photo sharing service has well over 5 million users now and roughly 100 million photos have been shared using the app to date. The ability to create books form your Instagram photos is actually compelling because the photo sharing app allows you to apply a variety of filters to your photos to make them more visually beautiful or interesting. Keepsy also allows you to create photo books from your Instagram photos.

Check out another Instagram-related app, Instacolor, here.

Blurb, the on-demand print service with a specialization in photographic layouts, is expanding its “crowd sourcing” strategy onto, where else, but Facebook with a new app that brings people together to create professional quality books.

This past October Blurb deployed a new feature for its desktop publishing software called Community Books that could be used to create books with others. The new Facebook application, called GroupBook and found here, does essentially the same thing except without the need for any download on the part of your friends.

Want to compile a book with all of the photos that you and your friends took at graduation? Invite them to participate in a GroupBook project and they can contribute up to 20 of their own photos with a simple upload form on Facebook. Once the contribution period ends, you can turn these photos into a book with Blurb’s BookSmart desktop client.

My only real gripe is that friends can’t submit captions along with their photos, leaving book owners to make ones up themselves. Also, you can’t pull photos directly from Facebook collections – a limitation imposed by the social network itself since Facebook doesn’t store and serve high enough quality images for print.

Blurb’s social features form a smart strategy in an age when electronic media is replacing many printed materials. I imagine this will help the company drive demand for so-called “personal” books, ones created not for profit. It shouldn’t have an effect, however, on the print of marketing materials, which form half of Blurb’s businesses.

When asked about Amazon’s recent foray into on-demand print services, CEO Eileen Gittins expressed a lack of concern that it would cut into Blurb’s business. Since relatively few people use Blurb to create books intended for sale (on Amazon or elsewhere) anyway, she doesn’t think the giant ecommerce site has any real competitive advantage in this area. Plus she thinks Blurb’s economics are better because the company does not take any cut from the sale of books, it just charges printers for the leads it makes.

The print-on-demand book business has thrived in the last few years as players such as Lulu, Blurb and others have catered to publishers looking to reduce overhead on inventory. It will be very difficult for anyone to compete with Amazon in the print-on-demand space.

The decision may also cause book prices to rise with the Wall Street Journal reporting that Amazon BookSurge prices are higher than other print-on-demand providers.

TasteBook is a service that lets users take their favorite recipes from partner sites (starting with Epicurious) and create printed cookbooks that are delivered to them and/or friends. Users can add their own recipes as well, and customize the book with their name and other information. Blurb, which was recently in the news, is somewhat similar but does not focus on recipes.

A book with 100 recipes costs $35.

TasteBook is based in Berkeley, California. It was founded in February 2007 by Kamran Mohsenin, the co-founder of Ofoto (now the Kodak Gallery), and Greg Schroeder, formerly the chief technical architect of Ofoto.

The size of the Condé Nast investment is not being disclosed. A year ago they acquired Reddit; however, to date they have not been known for making non-acquisition investments in startups.

Blurb, a self-publishing startup which specialises in illustrated books, is launching a new service to enable people to collaboratively create books. The new service is called Community Books and will initially launch in beta with photo sharing, which is Blurb’s most requested community-bookmaking feature. We last covered Blurb after their launch in May last year.

Using Blurb’s free desktop BookSmart bookmaking software for Mac or PC, you invite contributors and the content is assembled into one of several suggested book layouts. The software allows you to announce the book to contributors as well. As with other Blurb books, they can be shared, marketed and sold at cost or for profit in Blurb’s online bookstore. Blurb authors get to keep 100% of the book’s mark-up. There could be various uses for Community Books. For example a corporate retreat book featuring photos and funny anecdotes from the team; a ‘wrap party’ book made by people on a play or film production; or a wedding book with pictures and stories from hundreds of attending guests (the most likely use I think).

Eileen Gittins, Blurb’s founder and CEO reckons Community Book will appeal to “the connected creative class”. And I have to say the books themselves – which are full colour – really do look professional. And with a print and fulfilment operation now in the Netherlands, Blurb can also easily serve European markets as well as in the U.S.

I guess it might be possible to do something vaguely similar using Flickr and the various print services around it now, but I seriously doubt you would end up with as finished a product. Print is hard to get right.

Overall, Blurb’s business model is benefiting from the trend for content to become more and more structured online, making it easier to spit it out into a linear form like a book. There is even an emerging mark-up language standard for cookbooks, RecipeML. Founded by Gittins in 2004, funded by Canaan Partners and Anthem Venture Partners, and live since May 2006, Blurb initially came out with a tool to turn your blog into a book. Competitors like Lulu and iUniverse tend to focus on creating books out of manuscripts, rather that photo-oriented books.

Community Book is yet another shot across the bow of traditional publishers, to whom ‘crowd-sourcing’ a book would no doubt be yet another sign that the barbarians are at the gates.

You need to download their software to create a book – they have both Windows and Mac versions available. I’ll be testing this out but am having difficulty downloading the 20 MB Mac client (it could be my pathetic hotel Internet access). This looks very similar to Picaboo, which I wrote about late last year, albeit with more of a blog focus.

Now if only they could somehow make hyperlinks work in a hardbound book…

A few companies caught my eye today as the ones to watch this year. Here they are:

Blurb

Blurb will turn your blog or other website into a book. As in, a real, tangible book that you can hold. The service is now in private beta and will be available to the public in March(ish). CEO Eileen Gittins does a great job describing the product and this looks to be an interesting space, especially for ego-type purchases where bloggers buy a copy for themselves.t’ll be about $30 for a four color, 40 page, 8×10 hardcover book with a custom dust jacket.

Kaboodle

I wrote about Kaboodle, a clip service that is really useful for gathering and sharing information on the web, back in October. They launched some incredible new features this week to normalize data across items: search for items, clone/copy a page, find related items, vote on items, etc. They are also allowing users to create profiles to allow more social aspects. A lot of people are finding Kaboodle to be a very useful shopping tool.

Kosmix

Mountain View based Kosmix is a structured search engine with three current verticals: health, politics and travel. More are coming soon. Instead of showing linear, Google-like results, Kosmix is categorizing results to create a taxonomy. They claim their engine can be used to create good results over almost any topic area. This is one to watch and I’ll be doing a full profile on them soon.

Krugle

Fred Wilson wrote about Krugle today as well, saying “It’s a search engine for open source software. Vertical search for open source. Sounds like a good concept. The demo was simple and the proposition was compelling. Not sure how they make money, but the demo isn’t supposed to focus on that.” Knowing how often developers use search engines to find code snippets, this will be an extremely useful. The company is based in Silicon Valley and Josh Kopelman is an investor.

Plum

Everyone’s buzzing about Plum, a new social bookmarking application with easy tools to turn bookmarked content into blog entries, photo album, feed list, etc.. Full profile coming soon.

Sharpcast

Sharpcast, led by CEO Gibu Thomas, just launched this week as well. It’s an incredibly powerful platform to synchronize data and any application between (certain) mobile devices and the desktop. The photo showcase application is compelling. Look for a full review on MobileCrunch. Sharpcast is funded and has the smell of a company that can go all the way.

Zingee

I finally got a look at newcomer storage service Zingee, which would have been included on my “Online Storage Gang” post if they had been around. Zingee could be serious competition for Omnidrive, with high end sharing features, permanent URLs for files, no file size restrictions (yeah!) and other neat feature. Full profile coming soon.

Lots more companies to write about tomorrow. See Jeff Clavier and Erick Schonfeld for additional profiles.