From your point of view, how has the proliferation of online book reviews affected the publishing world?
I think the past 3-4 years has seen a sea change in how publishers are addressing their market. Although galleys and review copies have been sent to reviewers for quite some time, until recently the perception was that only the big-name newspapers, with their subscription lists of over 100,000, got to read/review the hottest releases before the release date. But with the decline of newspaper coverage and the corresponding rise in online blogs, many of whom have an audience in the thousands, things have changed. Before, it was hit-or-miss with the newspaper coverage, since so many various types of readers (some of whom would roll their eyes at any mention of the words "fantasy" or "science fiction") might or might not read it. But with online SF/F-devoted websites and blogs, it is much easier for publishers to focus their resources and not have as much of a "miss."
Publishers obviously have taken note of the rise in viewership in SF-related blogs such as Pat's Fantasy Hotlist. Before 2004, you just didn't see many dedicated online review sites and I believe readers were hungry for learning more about the "next big thing" and they wanted it spelled out in layman's terms with short reviews that focused more on plot summary and personal opinions than on a thematic exploration that was then the norm in professional reviews. So when certain blogs began to draw in a large, dedicated online audience, it was only natural that publishers would want for these bloggers to review their latest books. Add to that the promotional giveaways of galleys and signed books that were done in arrangement with particular bloggers and the publishers found a cheaper, more effective way to market their books to their intended audience.
Whether or not this recent "democratization" of the reviewing process will last, however, is uncertain. I have already started to hear some rumblings about how too many people are reviewing the same book at roughly the same time, with some being accused of being little better than the infamous Harriet Klausner in the quality and depth of their reviews. I would not be surprised to see in the next five years a consolidation of sorts, similar to what happened in the computer industry in the early 1980s in regards to operating systems, in regards to which blogs/review sites receive publisher attention. It all depends on how online reviewers evolve their approach to reviewing and if they can keep a large audience while offering something "different" from the other reviewers covering the same books. If there is a glut of reviewers for a particular genre, it may mean a sort of Darwinian fight in the near future to see which blogs are best qualified to receive review copies for particular books. The next five years will be full of growing pains for the fledgling online reviewer/publisher relationship and I do not know if we can predict well what will emerge after that span.
I do highly recommend that you read the full interview, as it's a very nice mixture of people in there and they all have some wonderful, wonderful points to be considered.