Would you like to read Ulysses 140 characters at a time? Is a short story just too long? Then curl up with a BlackBerry and dive into Twitter Lit—micro novels, online book clubs, and (gasp) real books.

“The bloody axe still on him, still dripping with the little fellow’s blood,” reads a line somewhere in the middle of Roger N. Morris’s book, A Gentle Axe. So far, an elderly prostitute has found the corpse of a large man swinging from a tree, and a dead dwarf in a snowdrift nearby. She has run for help. But I have to wait at least another hour to know what happens next.

That’s because I’m reading this book on Twitter, in tiny, 140-character updates. An hour later, I’m in the middle of answering an email when a little gift arrives at the corner of my screen: the next micro-installment of A Gentle Axe, which was published in 2007 and is now being serialized on Twitter. Embarrassed that I’d left the dead man hanging, I click for my next bite: ‘The dwarf was dead?’ ‘Murdered! His head bashed in. And the axe that did it was on the big one.’

Twitter has created new ways for authors and readers to interact, not to mention a little PR for a product or title.

James Bridle, a 28-year-old Brit who works in publishing and constantly experiments with literature on the Web, built a similar program that released Ulysses on Twitter, in 140-characer segments every 15 minutes. Although the book famously unfolds over a single day, it took eight months to Tweet. The retelling developed quite a following, Bridle not included. “I didn’t follow it, because it was kind of annoying,” Bridle said of his own project. “I didn’t want James Joyce talking to me every 15 minutes.”

While some, like Morris and Bridle, have moved books to Twitter, countless other authors are doing it in reverse, and turning “tweets”—those juicy (and cheap) little snippets—into books. And a new genre is born: Twitter Lit.

Yes, books have been published from blogs for years. But now, as the publishing industry slumps, microblogs like Twitter and Tumblr have turned out to be a place for writing to thrive. Several authors, publishers, independent booksellers, and even book clubs have set up shop on Twitter, and are benefiting from its expanding community. Twitter has created new ways for authors and readers to interact, not to mention a little PR for a product or title.

Take, for example, the brand-new Picador Book Club on Twitter–in which the publishing imprint chooses a selection of its own titles every few weeks for Twitterati to read and discuss. “As opposed to a book club that meets once a month, this will be every few hours,” said Darin Keesler, Picador’s VP of marketing and sales. “It’s our hope that it will have a really great effect on sales.”

The club’s first title will be Yoko Ogawa’s The Housekeeper and the Professor, which will be discussed on Twitter on April 10, followed by Augusten Burroughs’s A Wolf at the Table. Burroughs, a fellow Twit, will be in on the discussion. “Twitter enables people to have a lot more contact with authors, which is a good thing, and it’s something that publishing hasn’t done traditionally very well,” James Bridle said.

Bridle printed two years' worth of posts in a book, My Life in Tweets, through a self-publishing service. Though he’s not sharing it with anyone, Bridle is satisfied simply seeing his Twitter activity in hard copy. “In part, you realize all the work that went into it,” he says of the book. “In part you’ve realized how much time you’ve wasted.”

When HarperCollins reshuffled its imprints in February, one side of the company grew. The It Books imprint, designed to bring hot titles to the publishing house, will launch this fall. One title is the first authorized Twitter book, Twitter Wit, edited by Gawker alum Nick Douglas and due out next fall. Douglas will cull the best tweets from around the Twitterverse, and write an introduction. Twitter co-founder Biz Stone will write a foreword for the book.

Douglas says that he joined Twitter in 2007, and saved all of his favorite tweets since. Over the last two years, he has mined over 7,000 tweets, searching for 140-word gold. And he’s invited the Twitterverse to submit their favorites on Every contributor he selects for Twitter Wit will receive a copy of the book, which his publisher says is a great marketing tool in itself. “These books offer a unique grassroots marketing possibility,” said It Books editor Kate Hamill.

Kate Lee, a literary agent at ICM who specializes in online writers, says that an author’s digital marketing ultimately helps the sale of a book. “Anything an author can do on their own behalf is important, and is absolutely a plus for the publisher—and a plus for the author,” she told The Daily Beast. “They’re building their own fan base.”

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Lee says there’s no secret formula for a blog that makes a good book. It ultimately has to be a good, marketable idea. One such book she has recently signed comes from the blog Pets Who Want to Kill Themselves. “There was something human and universal behind how we all treat our pets,” she said of the site. “From the more practical perspective, these pet books sell like mad.”

It seems problematic, of course, to move the content of a free blog into hardcover and expect people to buy it. Andy Selsberg, author of a Tumblr called Dear Old Love who recently signed a deal with Workman Publishers, says selling the book requires a unique mix of new and old material. “When you change the water in an aquarium, you need to leave some of the old water in there so the fish don’t freak out,” he said. “Similarly, from the blog to book, there will be some new stuff, but also familiar things, because that’s what people have grown to like.”

Making books out of Tweets lets Twitterers enjoy, as Nick Douglas puts it, “the old-school joy of the printed word.”

“We don’t think it should be just the best writers and celebrities publishing out there,” Kate Hamill said. “We’re offering the opportunity to tell a story to a lot of different people.” Adds Kate Lee: “I look at blogs, Tumblr, Twitter—whatever you want to call it—as just another platform for finding talent.”

Plus: Check out Book Beast, for more news on hot titles and authors and excerpts from the latest books.

Isabel Wilkinson is a Daily Beast intern who attends Columbia Journalism School. She has written for New York magazine and Women’s Wear Daily.