Pearson reported this morning that sales at Penguin rose 2% for the first nine months of the year; the company reiterated that for the full year it expects the publisher to have improved operating margins. The sales gain was attributed to a strong publishing performance from both new and established authors including Alan Greenspan (The Age of Turbulence), Khaled Hosseini (A Thousand Splendid Suns), Jamie Oliver (Jamie at Home) and Elizabeth Gilbert (Eat, Pray, Love).

In other Penguin news, the New York Timesreported today that the publisher has pulled out of its deal with eMusic to sell its audio titles through the online music retailer. Penguin Audio publisher Dick Heffernan told the paper that the issue came down to fears about piracy, since eMusic, unlike rival iTunes, sells its titles without the DRM software that prevents files from being copied.

David Pakman, CEO of eMusic, pointed to the fact that the company had hired a piracy monitoring firm to allay concerns about piracy from publishers. The outside firm, BayTSP, has, he said, found no instance of audiobook files from eMusic cropping up on file-sharing sites.

Nonetheless, Penguin has concerns. CEO David Shanks told PW: "This technology is still evolving and our policy is to proceed cautiously. We are conscious of what happened in the music industry. Our main responsibility is to protect our authors’ intellectual property, and until we are confident that their works are protected, we won't take the risk."

Pakman thinks, however, that publishers need to recognize what consumers want and that's DRM-free files. "If [publishers] want to expand the market they need to offer their content in a format most desired by consumers — one that can be played on the devices actually owned by customers. The only such universally compatible format is MP3," he said, referring to the format eMusic uses.