Barnes & Noble's (NYSE:BKS) third-quarter financial results highlighted the idea that peddling books and music is a competitive business indeed. Its results were preliminary, since the company is still conducting a review of its stock option practices. However, the information we do have leaves some interesting questions for would-be investors.

If you consult our Fool by Numbers for the quarter, you'll see Barnes & Noble reported a loss of $2.8 million, or $0.04 per share, including $0.03 per share in stock option expense. Sales increased 3% to $1.11 billion. Same-store sales rose 2%, with B. Dalton being a trouble spot due to store closures.

Several bestsellers helped sales, including books by John Grisham and Barack Obama. Mitch Albom's book, For One More Day, was another hit -- you might recognize that title, since Starbucks (NASDAQ:SBUX) has made a high-profile move to distribute it in its cafes as well. (I was a little surprised to see that a bookseller would misspell Albom's name in its press release, but maybe that's just me.)

The major theme in Barnes & Noble's conference call was its decision to further lower prices on adult hardcover books in its membership program. "We believe that giving . some of the margin gains that we have realized back to our customers is a good long-term strategy," CEO Steve Riggio said.

Indeed. It's not lost on anyone that this is a hyper-competitive business these days. There's Borders (NYSE:BGP), as well as discount book chain Books-A-Million (NASDAQ:BAMM). And of course there's another giant in books and music -- (NASDAQ:AMZN), with its discounted prices and wide selection. Personally, I buy most of my books and music through Amazon or Apple's (NASDAQ:AAPL) iTunes, and I'm betting lots of people do the same -- these days, the ease with which people can obtain media online shouldn't be underestimated. And speaking of margins, Amazon's made a major bid for repeat patronage with its Amazon Prime program, a considerable act of aggression in the industry that helps persuade its customers to frequent its online store with its cut-rate shipping.

The holiday season is fast approaching (in fact, given retailers' early push this year, you could argue that it's already begun), and that's a great time for a company like Barnes & Noble; people are hitting the streets in droves looking for gifts for their families and friends.

However, Barnes & Noble's new emphasis on price-busting bears watching as it tries to drive higher growth in such a competitive space -- investors are going to want to see how well it does achieving higher sales volume and how that impacts profitability. It seems to me this is a good time to grab a book and wait awhile for Barnes & Noble.

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Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.