People say that if you aren’t paying for an internet service, than YOU are the product. Despite the somewhat Yakoff Smirnov vibe of the proverb, it is true that advertising is how most free internet services remain solvent. The exception is sites maintained by non-profit organisations like charities, or some hobby sites. An example is Project Gutenberg, the site from which most ebooks based on public domain works ultimately originate.
Project Gutenberg was founded in 1971, after Michael Hart digitized the Declaration of Independence when he was granted 100,000,000 worth of time on a computer at an Illinois university. He later jokingly explained that if the same number of people had the declaration on their computers, that money would not have been wasted.
Texts on Project Gutenberg are encoded in ASCII, the idea being that it won’t become obsolete any time soon and that its easy to convert to specific formats. The Gutenberg people are aiming to have their books compatible with the vast majority of computers.
Their history page says ‘by the time Project Gutenberg got famous… we did books such as Alice in Wonderland or Peter Pan because they could fit on one disk.’ This, and the fact that Project Gutenberg was founded long before the internet was available to the average consumers, makes me wonder how the Project Gutenberg would work if the internet never took off. I imagine that you could mail some USB sticks to their headquarters, and they’d fill them with the requested ebooks. If you made a donation they could send you a CD-ROM filled with a specialised collection, like all of Shakespeare or public domain science fiction. People would swap USB sticks filled with ebooks like trading cards, and borrow them to copy their contents onto their computer. The only guess I’m really certain about is that without the internet, Project Gutenberg would not be so successful in its goals.
Easy access to public domain ebooks was a key factor in my decision to buy a kindle. There was no way I was going to pay for books like a chump! So we can say that Project Gutenberg contributed to the success of ereaders.