While the company's roots lie in hawking technical manuals and books to corporate users, FatBrain has emerged in the past two years as a full-fledged information management provider. The company's document solution services now serve 300 of the Fortune 1000.

Last year, the company also launched eMatter, an innovative digital publishing initiative, which immediately captured worldwide attention. With interest for eMatter growing amongst consumers, FatBrain then decided to spin off this side of its business into a new company called MightyWords back in March.

All of this corporate re-shuffling, combined with the perception that FatBrain is still a pure e-tailer, has resulted in the market not treating FatBrain's stock price kindly to say the least. FatBrain's shares are down over 80% from its 52-week high.

We recently sat down with FatBrain CEO Chris MacAskill to better understand his company's overall future direction.

ISR: Let's strip away all the buzzwords and online publishing hype. What is FatBrain.com really today?

MacAskill: It's evolving, but it started as a professional bookstore that sells business-to-business. That is still the core of what it does, but it's heading in a very interesting direction. First off, to say a little bit about the professional bookstore, we go into people like Sun, Cisco, Microsoft and Intel and become their official bookstores.

ISR: On their corporate intranets, right?

MacAskill: That's right. So those companies will buy $300,000 worth of books from us a month. Their own employees buy these books individually, but then they get centralized billing and reporting. They really love that. As you know the business model for e-tailers in general is a very difficult model and no one has completely cracked it yet. I don't think there's a profitable e-tailer on the Internet yet.

ISR: E-tail has definitely been a tough nut to crack so far.

MacAskill: In any case, we've been laboring away at this business model for about three years, [while] knowing the difficulties of making profits with it.

ISR: I think that most people have the impression that you're still solely an online bookseller of technical manuals and books. You seem to be moving away from those roots actually?

MacAskill: Well, that's where we started. It is still the bulk of our revenues so I can understand the perception, but the company is migrating from that in a logical way. So in the future, it's not going to be anything like that.

ISR: Could you talk a little bit about your Information Exchange solution?

MacAskill: Basically, Information Exchange combines all the strengths of our company to solve a problem that is a headache at every Fortune 1000 company that I'm aware of today. Fundamentally, every corporation wants to go digital with their own documents to save time and cost.

ISR: Right. Definitely.

MacAskill: They all want a centralized repository of those documents that has a Web user interface. They love using FatBrain, Amazon and barnesandnoble.com. They don't like using their own internal document management software that is complex. They love the Web interface. So we do three things for them. First of all, we build them a Web site that can be branded for their company, but we run it. It is the "FatBrain experience." You get the cover scan, the ability to search quickly, descriptions of everything and it's your internal documents. It could be your annual report, your human resources manual or a research report your company wrote for internal consumption.

ISR: Okay. Why did you really decide to spin off your consumer eMatter publishing initiative into a separate company called MightyWords back in March?

MacAskill: Well, the original big idea behind eMatter was to secure digital documents and sell them. As it turns out that applications to a much broader audience than we had expected. It's not in FatBrain's charter to service authors in fiction. FatBrain's business is professional. It will always be that way. We're not going to dilute our business-to-business brand. We had two choices. We could either spin MightyWords off and cater to that big opportunity and have it separately managed and financed or we could just bypass the opportunity all together.

ISR: So this was the best strategy for nurturing this opportunity?

MacAskill: Yes. We just decided that if we carved it out that we had an opportunity for FatBrain shareholders to have a piece in the upside and for FatBrain management to not have to be distracted by this.

ISR: I'm going to play the skeptic for a second. What are the true barriers to entry that are stopping any existing portal or aggregation point from launching its own direct publishing platform like MightyWords for consumers?

MacAskill: I think there are a number of things. One is that we have digital rights management technology that gives a good user experience. As the world found out from the Stephen King sort of debacle...

ISR: Now, FatBrain didn't take part in that, right?

MacAskill: We didn't. Our fear is that 500,000 people had a bad user experience with that. If you go to MightyWords, you're going to have a good user experience. You're not going to have to download a big client. We don't force you to read it on the screen. Secondly, most of these portals aggregate content but they don't go out and collect these unique content that you can't get somewhere else.

ISR: At least so far they haven't.

MacAskill: Thirdly, I think what you're going to see is that MightyWords is going to be striking deals to syndicate its content to other partner sites. Rather then spend a lot of money to have eyeballs come to MightyWords, we're going to put our content where the eyeballs are.