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Barnes & Noble CEO Steve Riggio gave the most detailed account of how Barnes & Noble plans to navigate the digital waters in his conference call discussing third quarter results on Tuesday. E-book sales at the company have "simply exploded" Riggio said and B&N's market share of e-books on some titles is already higher than its share for print books. E-book sales have been helped by the release of the Nook, which Riggio said is B&N's single biggest seller, but the company has seen good growth in e-books used across a variety of devices ranging from the iPhone to Blackberrys.

B&N remains committed to offering consumers access to digital content "however they want it," and Riggio told analysts that the e-book market "is not a two horse race" between Apple and Amazon, adding that with its core technology in place B&N is well positioned to benefit from the digital boom. He called the sale of e-books the new growth story for B&N, one that could rival the 1990s when the retailer began rolling out its superstores. He said 2010 will be a "watershed" year for the company as it transitions from a bricks-and-mortar bookseller to an e-commerce retailer.

Its experience since returning to the e-book market last year with the purchase of Fictionwise has further convinced Riggio that the market will be more consolidated than the traditional bookstore market where it took B&N years to get its 18% (and growing) market share. He predicted that B&N will top the 18% mark in e-books "overnight." While some analysts questioned the need for B&N to develop its own e-reader, Riggio said the device helps bring people into stores and that the retailer plans to invest even more in its in-store Nook displays. He said its booksellers will become "e-book evangelists." Riggio said he expects pricing of e-books to evolve with the agency model likely to become the dominate form of sale and said that eventually B&N will earn better margins from e-books than print books.

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