The consumer ebook market has been a dud, according to some industry watchers. But what types of ebooks can or would sell well?
Success stories so far include Ellora's Cave and eHarlequin. Some people buy ebooks because they have an advantage over paperbacks: it's tougher for other people to see what you're reading. So if you want to read something raunchy in public, an ebook offers you a measure of privacy you wouldn't otherwise have.
Another market for ebooks are tech geeks who want the latest ebook readers and huddle close to the cutting edge of new technology and have something cool that most people don't.
So then it's easy to predict other potential ebook markets that would be profitable during the early stages of its development as well: hardcore fringe political writings on both the far left and right of the spectrum, and incendiary, extremist religious writings. In other words, the edges will fill in first, while the traditional stuff in the middle will be the last to make a big splash in the ebook world. In this scenario, during the early days of ebook reading, if you want to identify a fanatic, you would look for someone carrying a dedicated ebook reader.