As publishers continue to wrap their arms around digital books and as high-profile authors like Seth Godin announce their departure from traditional publishing, the book business is quickly experimenting with new media platforms.

So keep an eye on an intriguing new company launching officially this fall called Figment Fiction, that marries social networking, community and both user-generated and professional writing. It’s an offshoot of the cell phone novel writing that’s become popular in Japan and is attracting some heavyweights in the publishing business, such as Chronicle Books, PGW and Perseus. For more details on how the book business is tapping into social media, check out this week’s New Media Minute.