Barnes & Noble CEO Steve Riggio told analysts that the company's publishing program is "ahead of plan" and should easily hit the goal of generating 10% of B&N's total sales. Riggio maintained that B&N's publishing operation isn't "transferring" sales from existing publishers, but rather adding new product and incremental sales.

He said the publishing operation is supplying the company with high-margin product, noting that its Spark Notes line gives B&N an 80% margin compared to the 50% margin B&N received when it sold John Wiley's Cliffs Notes. Riggio promised that B&N would not engage in any "high-risk" publishing ventures, but will focus on developing "evergreen" content. A growing niche is the illustrated book market, Riggio said, telling analysts that since general trade publishers "are just about out of that business, we've kind of moved in and taken it on."

Regarding the pending assumption of Barnes & Noble.com by B&N, Riggio said an underlying strength of the e-tailer is as a direct marketer. He noted that between B&N's reader's programs and B&N.com's customers, the company has 10 million names that it can directly market to. Going forward, B&N's strategy will be retailing, publishing and direct marketing, Riggio said.