By any standard, the past 15 months have been eventful for Barnes & Noble. In September 2009, the company completed its purchase of Barnes & Noble College Booksellers and two months later introduced the Nook, its entry into the e-reader wars. This spring, B&N appointed William Lynch as CEO and announced a $140 million investment to upgrade its digital capabilities. In late summer, the retailer emerged victorious in a proxy battle (while announcing that it was exploring the possible sale of the company), and in the fall surprised the industry with the launch of Nookcolor. The man behind all these events, who is leading the nation's largest bookseller through an unprecedented transformation, is Len Riggio, PW's Person of the Year.

While acknowledging that "a lot happened this year," B&N's chairman says the year's developments have been long in the making. "We've been working hard on this for the past three years. The digital transformation didn't start in 2010," Riggio says. B&N had hoped to get into the device market as early as 2008, Riggio reveals in an interview in B&N's New York offices, but the company was unable to get the technology in place.

Although B&N may have been a little late to enter the e-reader field, Riggio is very encouraged by the reception the Nook and Nookcolor have received from customers and publishers. He is especially proud of the Nookcolor, which, Riggio says, "is the first time in the history of the company we made a technology leap over our competitors. From that perspective, it's very gratifying." B&N is manufacturing Nookcolors at a rate of 18,000 per day and is loading up a 747 every four to five days to bring devices to the U.S. from China, Riggio says. "We'll be up against it to produce enough for the [holiday] season," he says. Riggio expects demand for all e-reading devices to accelerate in 2011 due to positive word-of-mouth from customers, before tapering off in 2012. By that time, Riggio anticipates that new, upgraded and cheaper devices (including Nookcolor) will be on the market. "It's the history of technology. Function improves and prices decrease. It's inevitable."

As disruptive as the digital revolution has been and will be to book publishing and bookselling, Riggio says a bigger shift occurred more than a decade ago with the arrival of the Internet. The rise of the Web "disintermediated entire book categories," Riggio explains, as free online information led to declines in interest in a host of what had been strong backlist segments, like cooking, travel, reference, and how-to. Now, Riggio says, digital books are putting pressure on what had been the strongest sellers for bookstores, frontlist titles, especially for books that receive lots of media attention, while a number of genres have been affected by e-books as well. But that doesn't mean B&N can't profit from that shift. Taking the romance segment as an example, Riggio estimates that B&N has 2% of the romance physical book market but 26% of the digital business. And the sale of Nooks has helped to offset declining sales of physical books at the retailer's trade bookstores. With price points for the device well above that of print books, the average ticket purchase made by a Nook buyer is around $300 compared to the average $17 to $18 by book buyers, Riggio notes.

Selling Nooks as well as other nonbook products such as educational games and toys is part of B&N's strategy to attract more upscale customers to its stores in an effort to spur sales of books as well as provide new revenue streams to keep bookstores open. The tactic has increased sales of nonbook items and, while not stemming the steady drop in customer traffic, has slowed the decline, Riggio says. He also believes that just as bookstores devote less space to books, other outlets that sell books as a sideline will reduce the number of titles they carry, a move that will benefit all booksellers.

Riggio hears the experts talk about the demise of bookstores, but insists B&N remains committed to operating physical stores. "We intend to have a lot to say about the future of bookstores," Riggio promises. "We're in it to stay." Still, the challenge remains to make bookstores relevant in a rapidly changing media environment. Superstores were originally designed to be piazzas of culture, public spaces that offer both information and entertainment in book formats, Riggio says, and bookstores can still serve as community hubs. "The need to touch and feel things won't go away," he says, be that flipping through a book or learning how to use a Nook. There will remain a substantial number of people who prefer books in printed form as well as books that work best between covers, he predicts. Riggio's efforts to blend the sale of physical books with e-books is appreciated by publishers. "Len is the only person looking to integrate print and digital," says Simon & Schuster CEO Carolyn Reidy. For publishers to succeed, Reidy adds, "we need robust print and digital markets. What Len is doing is unique."

As much as Riggio is leading B&N into the digital age, he remains a bookseller at heart and a passionate advocate for the value of books. "I love books. I love selling books. It's been a privilege to have a career in a business consistent with my personal values," Riggio says. That career could be coming to a crossroads as a special B&N committee evaluates the company's strategic options, including the possible sale of the company. Riggio is on record that he is interested in participating in any group considering making a bid for the company, saying that he feels a deep sense of responsibility to B&N's employees and the institution itself. Riggio is hopeful that a decision about B&N's corporate future will be resolved in the first quarter of 2011.

Riggio founded B&N in 1965; asked if he could see himself working for someone else, he notes that he's been his own boss for a long time: "I started four companies from scratch: Barnes & Noble, Barnes & Noble College, GameStop, and MBS Textbook Exchange. I like to think I've been a great entrepreneur, a good executive, and a decent manager."

The executive part of Riggio recognized several years ago that B&N, led for the most part by retailing veterans, needed new blood. In recruiting William Lynch to head B&N's digital arm and then naming him CEO, Riggio says he was impressed by Lynch's "character, intelligence, willfulness, and experience in areas where we needed to improve." He says the people Lynch has brought on board have given a new dimension to the company, and that Lynch has done a good job in creating one corporate culture by blending B&N's traditional businesses with the new. "There has to be more than grudging acceptance," Riggio says. "It has to be a total embrace of what the company is trying to do."

Despite his strong ties to bookselling, Riggio has no qualms about the digital push being made by B&N and where its future lies. "It's more than symbolic that the new CEO has a technology background," he observes. Riggio equates the digital revolution to that of the mass market paperback explosion in the 1960s, which he says helped make books and reading more accessible by providing cheap editions that were available in many new channels. E-books share the same characteristics of being affordable and convenient and have the extra benefit of providing readers who have a Nook with the ability to tap into a store with millions of titles.

B&N's evolution is being closely watched by all publishers. "In this transformative year for book publishing, and for Barnes & Noble in particular, Len remains an extraordinary commercial and cultural force. As publishers and as book lovers, we deeply value his vision and achievements," says Markus Dohle, chairman and CEO, Random House. One thing that has long separated B&N from its competitors in the physical bookstore market has been its ability to execute, a trait Perseus Books Group CEO David Steinberger now sees taking place in the digital world. "It is really impressive how quickly Len and his team have pivoted to remake B&N into a leader in the e-book space," Steinberger says.

Although Riggio has clearly been energized by the challenge of transforming B&N into an e-commerce leader, he is looking forward to easing back a bit. "I don't have to be pushing as hard as I have the past three years," Riggio says. With the new team Lynch has put together, Riggio says B&N is probably better positioned to move on without him than ever. He has always looked to balance work with other pursuits, most notably with art, education, and social justice. Through Project Home Again, Riggio and his wife have built 100 new homes in New Orleans following the devastation caused by Hurricane Katrina. And it is with something of the same sense of mission that he believes it is necessary to help books make the transition from print to digital. "We have to embrace the digital revolution because of what it portends for improving the quality of life and the ability to learn for people all over the world," he says.