This year's longlist for the Man Booker prize drew the usual gripes about star writers being "snubbed" in favour of the "obscure" and unknown, but the judges hailed it as the most diverse selection ever.

"These 13 outstanding novels range from the traditional to the experimental, from the first century AD to the present day, from 100 pages to 1,000, and from Shanghai to Hendon," said Robert Macfarlane, chair of this year's judges.

It was a good list for the big publishing houses, which have in previous years been eclipsed by smaller independent rivals. Unexploded by Alison MacLeod – published by Penguin imprint Hamish Hamilton and set in 1940s Brighton, when a German invasion appeared imminent – is an early favourite, even before its publication in September. The independents have not done badly, however, with Granta, Bloomsbury and tiny Highland publisher Sandstone Press also on the list.

But this "wonderfully various" list comes as British publishing – all Man Booker prize entrants must be published in the UK – becomes a little less diverse, following the mega-merger, completed earlier this month, between Penguin and Random House.

The giant company, known as Penguin Random House, will control 25% of the world book business. With a back catalogue ranging from 19th-century master stylist Henry James to kinky novelist EL James, and nearly 250 separate imprints, Penguin Random House will publish 5,000 new titles a year.

The group unites two of the most illustrious names in the book industry. Penguin dates from 1935, when publisher Allen Lane, after being unable to find anything to read at Exeter station, decided to start selling paperback editions of Ernest Hemingway and Agatha Christie for the price of a packet of cigarettes. Random House was founded by Bennett Cerf and Donald Klopfer in New York in 1924, to bring the classics to a mass audience. Both companies won legendary victories against censorship: Penguin battled in the courts for Lady Chatterley's Lover, while in the US, Random House defended James Joyce's Ulysses against charges of indecency – the American judge helpfully listed the pages containing "obscene" content, much to the amusement of the author.

The merger of these big names into a powerhouse with £2.6bn in sales a year was one of the biggest events in the publishing world since Jeff Bezos started selling books over the internet from his garage back in 1994.

And it is Amazon, with its formidable pricing power, that is the gorilla in the book industry jungle. Last week the giant online retailer reported sales totalling $15.7bn in three months – of which $4.4bn came from books, music and DVDs. Its publishing division recently announced that German novelist Oliver Pötzsch had become its first million-sales author, in print and e-books, for The Hangman's Daughter and its sequels, about a 17th century Bavarian executioner-turned-detective.

"When mergers like this happen, it is a response to the competitive situation they find themselves in," says Richard Mollet, chief executive of the Publishers Association.

The new company, led by Random House's Markus Dohle, is 53%-owned by German media conglomerate Bertelsmann, while Penguin's owner, Pearson, takes 47%. Its headquarters will be in New York, and key British staff have been moved out of the frontline. John Makinson, head of Penguin Group since 2002, has moved upstairs to be chairman of the new group. Dame Gail Rebuck, one of the most respected figures in UK publishing, is stepping back from the day-to-day running of Random House UK to another chairmanship job.

As the Booker longlist titles get piled up in shop windows and on special-offer tables, these changes are unlikely to catch most readers' attention. But insiders worry the tie-up will be bad for authors, depressing their advances and reducing the care and attention they get from their publisher.

"It is bad news for writers," says Andrew Franklin, founder and managing director of independent British publisher Profile Books. "How do you publish 15,000 books well every year? How do you make each distinctive and important each year and make the author feel their book really matters? I have no idea and I think they have no idea either."

The Society of Authors is worried writers with modest sales will fall down the priority list. "As publishers get bigger, it may not be economical for them to support authors [selling] 2,000 or 3,000 books, or promote the back catalogue," says Nicola Solomon, the society's chief executive. "My guess is they are much more likely to put that money into something that might make a super-profit for them, something new or sexy that might be a runaway success."

And although Penguin Random House insists it will continue to compete in auctions for authors' work, not everyone is convinced. For serious non-fiction works, when Penguin and Random House's Bodley Head are often the only two in the auction, competition will cease, says literary agent Clare Alexander. "They will continue to compete with each other unless they are the only two in the auction, but often for serious non-fiction, they are the only two in the auction. It will definitely diminish advances in the UK."

Penguin Random House dismissed these concerns: "In the UK and worldwide, Penguin Random House will encourage healthy competition between its imprints."

The merger has also heightened concerns about an exodus of talented women at the top of publishing. Rebuck's move away from control of Random House comes after the shock departure of Victoria Barnsley, chief executive of Rupert Murdoch's HarperCollins for 13 years.

"There is a default to the male mode," says Alexander. "Publishing is full of women, and it will continue to be full of women, but not at the executive level, and that worries me considerably. It is not a personal thing about who is coming in; it is a general thing about an industry that has managed very well under these women, and now they are gone."

Amazon's influence may be unsettling the traditional players, but not everyone thinks that is an insurmountable problem. One industry insider points out that Amazon is only the latest bogeyman, following worries about supermarkets – and, in an earlier age, WH Smith – driving down prices.

"No one is really in publishing to make big margins," the insider says, "which is why you don't have too many venture capitalists. But it is a business that is stable and growing very nicely."

Unlike CDs and printed newspapers, the public's appetite for fiction shows no sign of waning. Paperback fiction sales rose 3% in 2012, reaching £502m, while digital sales have skyrocketed, up 66% in 2012 on the previous year, to £411m.

"It is a great time to be a very small and dynamic independent publisher," says Jamie Byng, managing director of Canongate, which had a Booker prize- winning hit with Life of Pi.

He thinks the indies have nothing to fear from the Penguin Random House merger, arguing that it will expand the market for books and help the industry emulate the success of Facebook and Apple in reaching consumers: "[Penguin Random House] are going to combine a lot of their thinking and clout to bring about innovations – new ways of reaching people, more use of digital communications to connect authors with their readers. The industry is in an incredible state of flux. No one has a clue what it will look like in 10 years' time."

Predicting the shape of the industry is almost as tricky as calling who will walk away with this year's Man Booker Prize – winning a £50,000 prize and an assured sales bonanza. Jim Crace is the bookies' early favourite for Harvest (Picador), a tale of peasants forced off the land in the late-medieval enclosures; while Colm Tóibín's The Testament of Mary (Viking) is also a frontrunner.

Any book on the longlist can expect a lift in sales of at least 10,000, according to Byng, although the real boom in sales does not kick in until later on. "It doesn't really get interesting until the shortlist."