Is Outsourcing Dead?

Each day, Inc.'s reporters scour the Web for the most important and interesting news to entrepreneurs. Here's what we found today:

Will Google and Amazon enter the outsourcing business? It may play well on television, but BusinessWeek is predicting that outsourcing as we know it may be coming to an end. Sort of. The rise of cloud computing, the article suggests, will put the traditional outsourcing industry in jeopardy as tech giants like Google and Amazon take market share from smaller businesses in the U.S. and India. The article says that traditional outsourcing has reached the limit of the savings it can produce.

Who invented the e-book? According to the Los Angeles Times, "Johannes Gutenberg may have invented modern printing, but Michael Hart invented the e-book. At least that's what Hart's e-mail signature says." The mysterious Mr. Hart, who would not agree to a phone interview with the Times, is the founder of Project Gutenberg, which is in the process of digitizing millions of e-books. His goal? To broaden the digital reading ecosystem by getting 1 billion books (er, that's 10 million digitized books translated into 100 languages each). Hart's been digitizing thousands of books a year, and says the process hasn't changed that much since he began transcribing and scanning pages in on July 5, 1971--just there's "more scanning, less typing" nowadays. The article, and Hart, are mum on whether Gutenberg will strike future deals with Google. Whatever happened to Google Editions, an e-bookstore that was slated to launch this summer, anyway?

The baby jean bright-spot. You may not be able to afford your mortgage payment, but can you afford not to outfit your baby in the latest skinny jeans? That's the question posed by the Wall Street Journal today. As the recession continues to hammer the retail industry, parents are apparently spending lavishly on outfitting their babies. BecauChildren's clothing sales are up 5.3 percent year-to-date. And trendy new items, such skinny jeans for chubby toddlers, are a particular bright spot.

Finding the right market for your start-up. Emily Hickey has a post at her blog EarlyStager about the qualities to look for in a market before parking your start-up there (via ReadWriteWeb). The key components, according to Hickey, include lots of other start-ups, strong media interest, a healthy investor community, and "big incumbent anxiety."

The sweeter side of the death business. Would you like a fresh-baked brownie with that headstone? The Journal reports on the innovative marketing practices of the modern cemetery industry. To lure clients in while they're still alive, cemeteries have been hosting parties, fairs, dances, and poetry readings. The Journal explains this curious trend: "Because more Americans are opting for cremation, demand for burial plots has been slack. To attract more customers, cemetery superintendents say they must lighten up their image."

SoMA's startup boom A vacant office building in San Francisco is now filled to capacity with tech startup companies. According to the Journal, the success of 410 Townsend St. in the South of Market neighborhood represents "Silicon Valley's broader tech recovery." The article also suggests that SoMA is where it's all happening--at least when it comes to Web start-ups. Not only does Twitter call the neighborhood home, but sites like Yammer, Eventbrite, Shop It To Me, and TechCrunch have all set up shop in 410 Townsend, and are even competing with one another to see who can grow the fastest. Eventbrite's CEO tells the Journal, "I've got a competition with Yammer to see who will outlast the other in this building and get the other's space. It's a death match."

How one company remade itself after a crisis. The New York Times writes about a turnaround at FreshDirect, an online grocer that makes 45,000 deliveries a week to customers in the Northeast. The company was extremely successful at attracting first-time buyers through incentives, but about 85 percent of them just placed one or two orders before giving up on the site. "We broke too many eggs," CEO Richard Braddock tells the Times--and he's not speaking metaphorically. "We showed up with thawed ice cream. We bruised the produced. We delivered late." Braddock's solution? He weaned the company off of incentives, and focused exclusively on growing revenues by providing good service to return customers. Sounds familiar, doesn't it?

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Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin