Today, Nick Popio of Lulu.com announced on the Lulu Blog that they are discontinuing the Published By You (PBY) option. Authors now have to use either the Published by Lulu option and list Lulu as the publisher and use a Lulu owned ISBN, or they have to purchase their own ISBN outside of Lulu to assign toward their book.
In a few weeks, all books will have the option to assign either a Lulu owned ISBN or your own ISBN to your Lulu books in the publishing wizard. This means you won’t have to create your book, wait for approval, and then create a new revision to add the ISBN information. Like the Published By Lulu (PBL) package we used to offer, if you assign a free Lulu owned ISBN, Lulu will act as the publisher on your behalf to retailers and wholesalers. If you assign your own ISBN, then the publisher listed with your ISBN will be used.
I personally think this is a step backwards for Lulu because having used their PBY option for my own book, I felt it was the best fit for me and the most economical and time efficient. It made getting an ISBN registered through Lulu, paying for the ISBN through Lulu, and creating my book all through Lulu much easier.
So far, comments on the announcement are few, but mixed. Read the full announcement at the Lulu Blog.

I’m in full agreement that it is a step backward. This is a move which takes away some of the differentiation that Lulu has offered in the past.
Wow! I was going to use Lulu for the print version of a collection of humorous stories I’m putting together. Looks like I’ll stick with CreateSpace now.
I agree, it’s a step backwards. I’ll have to find another company for my future self-publishing.
I never liked Lulu managing the ISBN process anyway. Not to mention that I could never use my own ISBNs with them for distribution, and that’s why I left and went to Createspace in the first place. Their book sizes are not standard either, and until they get with the program, I won’t be returning. All that said though, I think this is a smart move for them. They want to be true subsidiary press like Booksurge and Outskirts. That’s where the money is and they are in business to make money. If an author desires the independence of their own imprint and their own ISBNs, they really should manage the whole process. Buying and registering the ISBNs with Bowkers takes about 3 minutes per book. You have to do that with Createspace unless you use their ISBN. It really doesn’t take that much time. Not to mention buying a block is much cheaper in the long run. I wouldn’t be surprised if more fees start cropping up at Lulu. Lightening source charges 12.00 per year to list your book in the catalogue. Wonder when Lulu is going to start passing that along to its authors? It’s only a matter of time.