It really pays to follow blogs of people in the industry, and I cannot recommend Janet Reid's blog enough. She's a literary agent with Fineprint Literary Management, in New York City. She blogs frequently, is often on Twitter, and is rather approachable in both of those venues. Alas, she doesn't represent my genre(s), though she does rep some great authors (like Patrick Lee and Jeff Somers).
However, this week, she addressed the question of Serialization On the Web. If you'll recall, one of the March Flash Fiction prompts I did resulted in "Klara and the Clockwork Djinn; or, Matchmaking at the Museum", a story set in my Steampunk South Africa. I've thought about doing a serial novel, writing more about Klara, and her "sky jockey", but I'd hesitated, because I don't really want to self publish. I don't feel as though I've got the skills and/or the handle on the industry for it. Do I really want to be my own editor, cover designer, advertiser, and accountant? Nope. Yes, self publishing authors frequently pay people for these jobs, but, well, a trade publisher takes care of that for you too! So is online serialization a bad plan, if I then wanted to query the novel?
What Ms. Reid says, ultimately, is "But don't worry that in publishing a book to the web you've closed any doors. It's the amount of attention the book receives that will determine that."
And really, that's how Fifty Shades of Grey worked out. First it was Twilight fan fiction (I'm not sure on which site, but there are numerous fan fiction sites). It was very popular as such, is my understanding. Then, E.L. James filed the serial numbers off enough that it was her own story; no Bella or Edward, no vampires. Then she self published it, and then the Random House deal came along. Pretty swag, right? Regardless of how you feel about the book itself, she's a success story.
(or, reading the Wikipedia article, it was boutique published first, not self published? Whichever. I'm a little unclear, but am admittedly lazy and don't want to read more in depth info on it. You get the gist.)
So anyway. If Klara's story happens to take off (pun intended! Zing!), and get a following, and then I put the thing together and polish it up and query it, I can point to that following as a success. I can say "I've already got all these fabulous Steampunk fans!"
Just some musings, to which I am prone (see blog title). The second chapter isn't written yet, lest you've gotten your hopes up. Though I guess it's worth asking: Do you want to read more? I'd love to hear from you!