I assume your students are interested in self-publishing. Traditional publishing is a whole different ball game.
Key Factors To Consider
- Rights. One of the main draws of self-publishing is that you keep all your rights over your work. However, plenty of sub-par services exist which'll be happy to take 'em off your hands. Before posting work anywhere, and certainly before agreeing to terms with a publishing service, be sure you understand the terms and that they are acceptable to you. See these two blog posts on the prevalence of scammy and rights-grabbing services on the internet. Relevant rights include:
- Creative Rights. No respectable self-publishing service claims any creative rights from you. A service demanding reprint rights, translation rights, movie option rights, anything... should be considered highly suspect.
- Formatting. Some services may include formatting your ebook for you, possibly including cover design. If this is the case, be very careful - simple formatting of ebooks is not difficult, and you might prefer to do it yourself; bad formatting of ebooks is not difficult, and that might be what the service will leave you stuck with; really good formatting of ebooks is difficult, and you might want to get good help with that. In general, avoid locking yourself into services (editing, copyediting, cover design, etc.) until you're sure of the quality of service you're getting. If there's a service you're considering, try buying some books who enjoyed the service, and make sure they're satisfactory.
- Exclusivity. Some services may demand exclusivity (e.g., Amazon's KDP Select offers potentially greater exposure, in return for exclusivity). Consider whether the terms are worthwhile for you. Exclusivity is going to require at least some tradeoff with exposure.
- Exposure. You want your ebooks visible. That means you want your platform visible. Better to choose something popular that lots of people see, than something that sounds good but is relatively unknown.
- However, since you're keeping all your rights, nothing keeps you from publishing an ebook to multiple venues and platforms (unless you choose a platform requiring exclusivity). For example, if you publish on Amazon, you'll likely want to also publish on BN.com for the Nook - otherwise you're limiting your audience to Kindle-owners. You might additionally use another service, like Smashwords or an independant site, to offer a convertible, DRM-free version.
- Pricing. Some services have limits on how you can price your ebook (for example, I believe Amazon does not let new authors offer their books for free), or may not give you control over the pricing at all. This isn't necessarily a problem, just be sure you understand pricing policy before you commit to anything - low pricing is a big part of making a minor story attractive; higher pricing may net more money! You want to avoid getting yourself stuck in a situation where you don't like the price but can't change it.
- Income. Each service takes some cut of the take - compare, contrast, and pick the ones offering good terms.
As to your other questions: when you self-publish, you can self-publish whatever you like; publishing single stories is extremely common.
And do authors make money from ebooks? Well, most of them don't make very much. But an attractive, low-priced read can be promoted. If you're willing to put effort into it, then you'll draw some readers; if they like what they see and you keep putting in effort, you'll draw some more. When ebooks do take off, they can do quite nicely for an author - people are willing to take a chance on them because they're inexpensive; the author can sell as many copies as he has buyers and all he gets is his cut of the take; even a small trickle of interest can be substantial over time; and actual popularity can sometimes snowball. Don't give up the day job - but if you're serious about selling ebooks, put work into it, and you've got a chance to do decently at first, and maybe pretty well as you progress.