In the non-digital world (5 - 10) years ago, independent bookshops and local libraries, peacefully co-existed, albeit separately, each with a seemingly separate mission. Each had it's own resources, and was somewhat limited to what those resources could supply to their communities.
Libraries are (generally) public institutions - founded for the greater good of all the citizens of a particular community (city, town, college, etc.). Bookstores are (generally) private entities, peddling their wares to individuals of a particular community (city, town, museum, market demographic).
The main difference between them though, seems that one is about providing entertainment and information for free, and the other is about providing entertainment and information for a price (note the lack of the word, 'profit').
Aside from that, however, they have many things in common. They provide similar types of materials to their patrons. They help and recommend items to their patrons. They are both under tremendous financial pressure. Neither really knows how to embrace the digital age. They both work with the community to foster reading and literacy. They both have the same suppliers (publishers), and they both 'curate' their collections to serve their communities.
At the AAP General meeting last week in NYC, I heard Ann Moore, CEO of Time, Inc. say that in a digital world, content from 'trusted providers' will be where the public turns. I also heard Peter Bloom use the word 'curation' to describe how 'trusted content providers' will be appreciated.
If you think about it, bookstores and libraries are, in their heart of hearts, curators of a certain collection of product. And, it is this concept, that they each curate on our behalf, that makes them so beloved by their communities.
So, is there a collaboration between libraries and bookstores possible? Well, my personal opinion is that they had better, or they will fall even further behind in the public's list of trusted content providers. Part of this opinion comes from the FACT, that this type of collaboration is happening already, except that it is being done by a publisher!
I am very intrigued by what I heard (and have since, seen) about what Tim O'Reilly is doing at oreilly.com. Working for a community that has never been particularly well served by either bookstores or libraries, O'Reilly has seemingly taken the best of both worlds and created a 'Library for Profit' space on the internet. O'Reilly provides tools for programmers and other technology aficionados. Note the word 'tools'. I didn't say books. I didn't say research material. And, I didn't say source code. However, he does provide all of that.
He helps programmers figure out what they need themselves by providing lots of free content, and lots of free contextual metadata. He allows educators to put custom course packs together. He provides (for a price) access to his entire library of collected works. He even allows them to comment on works in progress. And, of course, he sells books - and lots of them.
This sounds a lot (save the point about works in progress) like what bookstores and libraries do.
Now, I don't know the answer to the question of how libraries and bookstores should collaborate. What I do expect, though, that in the next few years, if they don't, we will see far fewer of them both in our communities as their individual missions will seem too anachronistic for the public to support.