Flat World Knowledge, a startup based in Nyack, New York, has taken Napster-like aim at the US$8 billion college textbook market. The company offers free Web-hosted titles by expert authors. Anyone can download and modify the books' content to fit a specific school's curriculum. Despite the gloomy economy, Flat World Tuesday morning announced $8 million in Series A funding from Greenhill & Co., Valhalla Partners and High Peaks Venture Partners.

Flat World calls its textbooks "open source," although to be clear, the company does not accept contributions to its downloadable copies. The idea is that educators can fork the source, so to speak, for their own needs. There are currently thirty titles in Flat World's catalog, on topics ranging from accounting to marketing to (of course) information systems. Some are complete, but many are still in the process of being written and edited for 2010.

How will Flat World make money from free textbooks? By selling students soft cover textbooks, audio textbooks, and self-printable individual chapters. The company intends to pay royalties to authors from this revenue.

Greenhill managing director Brian Hirsch said in a prepared statement, "The $8 billion annual college textbook publishing market is poised to undergo a radical transformation in the coming years similar to what we've experienced in the music and newspaper industries. College students are digital natives and are demanding the ability to consume and interact collaboratively with educational content anywhere, anytime and anyway."

With schools, students and parents worrying about every dollar, it's possible that a download of Libby Rittenberg's upcoming Principles of Economics will become a viable alternative to a $140 new hardcover copy of Paul Samuelson's classic econ textbook. Surely Samuelson the economist would understand.