I have no idea (and look forward to an expert answer) but I'm pretty sure it would be the films and not the books.
As to where? Where ever they want to, baby! LOL. Actually, I am in no way familiar with where there are existing build-out spots at Universal, but I think they have a bit more land than we may think based on things like the removal of Jaws. I believe that was done because it was the best location, and that ride was a huge maintenance nightmare and high-cost to keep up (just the propane alone was apparently astronomical). I also have an inkling that Universal may go on a buying spree at some point, akin to what Disneyland eventually did, buying out key properties in the area.
But again - no idea - and look forward to the experts weighing in.
It would be the films. And would replace most of an existing 'island' at IOA. And I am NOT saying it is happening.