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In the prevailing competitive environment, libraries seem difficult to survive with traditional information services. Many of business organizations seem to practice multidimensional businesses and expand their profit potentials through diversification. Getting experience from business sector organizations, university libraries need to strategize the service delivery and retain the users through diversification of the product/service. Diversification can be implemented through innovation of directly related library services, indirectly related services and additional services probably not related to the typical library service but would be possible to provide by the library (out of the box). This paper investigates the Sri Lankan university librarians' perspective towards the implementation of such services in their libraries. The study also examines the possible barriers for the diversification. The paper involved the conceptual analysis and sample survey with library practitioners. Findings indicate that university libraries in Sri Lanka are providing diversity of services and have made many attempts to diversify them through 'direct library services', 'indirect library services' and 'additional services'. Relatively higher potential is shown with regard to directly and indirectly related services but the diversification through additional services indicated very low. The librarians face challenges for diversification stretching out through administrative factors, knowledge deficiencies, organizational environment and attitudinal issues of library managers. [ABSTRACT FROM AUTHOR]