Design a website that will be used exclusively as the "reading room" for your new book. If you're new to website building, don't panic. Not only are there plenty of affordable software programs to walk you through the steps but you can also find a wealth of advice online (see Resources section below). Another option is to barter services with someone who is good at all this techno-wizardry but is looking for a writing expert (you!) to help him with his admissions essays, term papers, or short stories. This sort of trade is a win-win for both of you and your only cost is in the monthly fees to host the website.
Identify who your target market is for this book. To start an effective cyber buzz and let people know it's available online, you'll need to visit the website chatrooms and community forums where these readers tend to hang out. To start some preliminary chatter about your work, register for free accounts at websites such as Gather, American Chronicle, Hub Pages, and Blogger (Resources). All of these allow you to talk about your experiences as a writer, offer writing tips, review books, and - most importantly for the purposes of this article - upload teaser chapters to direct people to your website.
Decide how you want to make your serialized chapters available to your readers. One option might be to create an opt-in newsletter wherein registered subscribers to your website will be able to receive each new installment via email. Another option is to provide a password protected site that allows access only to those who have the code. A third option is to post a new chapter on the website every week or two that can be read by anyone who discovers the website by accident or has been directed to it through your own aggressive hype. As each new chapter is posted, the prior chapter is deleted, a methodology that would require extra work on your part to summarize "the story so far". The fourth option is to post the first three chapters (which, hopefully, end on a major cliffhanger) and offer the balance of the book as a download for a small fee.
Check out marketing tools such as Google Ads (http://wwwadwords.google.com) and Professional Hits (http://profhits.com) to direct traffic to your book's website. If you have friends and associates who have commercial websites for their own ventures, exchange banners and links with them. While there's not a lot of money to be made at the start from publishing your book online unless readers can only get it through a payment system, it is possible to generate a steady income by having advertising on your website. The way this works is that if someone clicks on a product through your site and buys it, you get a percentage of that sale. The Google Ads website explains in detail how this works.
Establish yourself as an expert by reviewing books on Amazon and writing freelance articles for newspapers, magazines and online publications. Always include your website as part of your signature block on all outgoing correspondence. Gives talks at schools and civic organizations.
Think outside the box in promoting your book. For instance, a website such as Hub Pages could be used to start an interactive novel in which each chapter you post ends with three different options for the start of the next chapter. Make it a fun game that engages your readers as active participants in the outcome of the story. Another option is to incorporate an audio component in the chapters. With as much time as people spend on their computers, they might be intrigued by an online publication that invites them to listen to narration, music and sound effects while they are doing something else at the keyboard.