Last year, there was a palpable excitement at the Frankfurt Book Fair about the commercial development of e-books. But moving text from the page to the screen will be remembered as “a minor moment” in the history of books, said e-book pioneer Bob Stein, kicking off the 2011 Frankfurt Tools of Change conference—and the marriage of publishing and computing is only now about to yield its offspring—the “networked” book. Stein was followed by marketer Mitch Joel, who also stressed the value of social networks and urged publishers to deeply re-think how they reach consumers. “What I can tell you is that you have an amazing opportunity,” Joel said, “as scary as it might be, as radical a change might as it might be.”

Now in its third year leading into the Frankfurt Book Fair, the O’Reilly Tools of Change Conference once again set a bold tone for the publishing industry’s largest annual gathering. Where just last year fair-goers finally seemed to be getting a handle on the burgeoning e-book market, the morning keynote speakers challenged publishers to re-think the very nature of books in the digital age. Stein compared current e-books to water coming to a boil. “Water just before it starts to steam still looks like water,” he said, saying digital books were “about to start to steam.”

Co-director of the Institute for the Future of the Book and a longtime innovator in digital publishing, Stein's current venture—Social Book—aims to turn reading from a solitary pursuit to a networked experience, where readers and authors can read books together, in constant communication, transforming the book from a staid object in the print era, to a live, active place online. In the future, books will be in the browser, he noted, saying that apps “reproduce the sad things of the print world.” Online, he maintains, books should be open, and become “social spaces where readers can congregate,” whether with other readers, friends, or historians or critics, or sometimes with the author, and going forward, a publisher’s core competency should be building communities.

“As the value of content approaches zero,” Stein said, “people will pay for context and community.” He urged publishers to imagine a world where author readings can take place within books, and textbooks that can come with 20 hours of free tutoring. Publishers have an opportunity to do more than “just change the shape of the work,” he said, but “to change the whole ecosystem,” making books a “place where value can be exchanged within the pages.”

Digital marketing expert Mitch Joel, author of business bestseller Six Pixels of Separation (published by Hachette’s Grand Central Publishing), followed Stein’s theme, telling conference-goers that publishing is facing “a revolution,” and needs to “re-boot.”

Consumers in today’s networked world are moving faster than marketers, Joel noted, and their expectations are only growing. He noted the impact of tablets and smartphones, and how innovations like Amazon Prime have turned virtually everything into an impulse buy—and suggested this was the new normal. He said the issue facing publishing was not “paper or plastic,” but about where books fall among the choices consumers make. “What are we going to do to connect readers with our authors?”

Like Stein, Joel said harnessing the power of social networks is key, and that the digital age has made the most powerful marketing tool of all “word-of-mouth” more powerful than ever before. He urged publishers to “break the mass media mindset" and take advantage of “real interactions, between real people.” In fact, cultivating “direct relationships” is critical for publishers, “because if you don’t, your authors will, and retailers will.”

He closed with six points for publishers, the first of which resonated broadly: “accept it.” Joel said his impression is that publishers are going into the digital age “kicking and screaming,” fighting over publishing laws, geography, or with stores. “Someone has opened up an opportunity to sell anything anywhere, and we’re fighting it?” he noted. Is this normal?”

He urged publishers not “to instill your values today” on world that is about to come. “The worst thing you can do is fold your arms and say people will still buy books the way we tell them to.”