Barnes & Noble Inc. (NYSE: BKS), like rival book company Borders before it, will not survive as a standalone company. That leaves its board and investors with the challenge of where it may find a new home. The most logical buyer is Wal-Mart Stores Inc. (NYSE: WMT), which needs a presence in the e-reader, e-book, online content and tablet PC businesses that it cannot find elsewhere.

The latest evidence of Barnes & Noble’s ongoing disintegration is its most recent earnings report. The worst part of the slaughter was a drop in sales at its critical Nook e-reader business. The Nook has been the firm’s only real chance to compete with Amazon.com Inc. (NASDAQ: AMZN), which has had a surge in its revenue, due in part to success of its line of Kindle e-readers and tablet PCs. On the other hand, physical book sales through its stores and online have not had enough success to sustain Barnes & Noble without e-book business. And that business is under siege.

Barnes & Noble reported on its fiscal year-end results:

Fourth quarter consolidated revenues decreased 7.4% to $1.3 billion as compared to the prior year. The consolidated fourth quarter earnings before interest, taxes, depreciation and amortization (EBITDA) loss was $122.0 million, as compared to a loss of $9.7 million in the prior year. The consolidated fourth quarter net loss was $118.6 million, as compared to the prior year net loss of $56.9 million. Fourth quarter net losses were $2.11 per share as compared to a net loss of $1.06 per share a year ago.

More particularly, Nook revenue fell 24% to $108 million. No amount of outside help has been able to revive the Nook’s performance. Barnes & Noble created a semi-independent operation to house the Nook business, and its college operations, in 2012. Among the investors in the new company was Microsoft Inc. (NASDAQ: MSFT), which put in $605 million to support the Nook initiative. In an action that likely alienated Microsoft, the Nook runs Google Inc.’s (NASDAQ: GOOG) Android, and Barnes & Noble promotes its 700,000 apps.

In its effort to compete with Amazon, Walmart has no flagship product for its e-commerce efforts. Walmart.com is an extension of its physical stores, and nothing more. While the Kindle sits front and center at Amazon.com, as well as represents the most attractive of the product lines at the world’s largest e-commerce site, it also uses the Kindle as a means for getting customers to return to the site. Beyond e-books, the Kindle has an army of products and services for its owners. Among them:

Over 23 million movies, TV shows, songs, magazines, books, audiobooks, and popular apps and games such as Facebook, Netflix, Twitter, HBO GO, Pandora, and Angry Birds Space

Integrated support for Facebook, Twitter, Gmail, Hotmail, Yahoo! and more, as well as Exchange calendar, contacts, and email

Front-facing HD camera for taking photos or making video calls using Skype, Facebook, and other apps

Free unlimited cloud storage for all your Amazon content

The suite of hardware and content is as close as any other to Apple Inc.’s (NASDAQ: AAPL) iPad and its universe of software and content.

Walmart has the second most visited e-commerce site in the United States. While it sits well behind Amazon.com, millions visit it each month. The Nook and a series of products related to it would give Walmart.com the user “stickiness” that websites prize so highly. And the flow of traffic to Walmart.com is large enough to rekindle the Nook’s fortunes. It also dovetails with Walmart’s barely visible MovieCenter operation, which originally was built to challenge Amazon, but never has.

Walmart has the capital to drive an investment in the e-reader and e-content businesses, and it could put tens of millions into an initiative to support growth of the operation. As for a buyout of Barnes & Noble, based on its market value and the likely value of the Nook operations, which together sit at barely $2 billion, it is a rounding error for Walmart. However, it may be Walmart’s last and best chance to be gain more relevance online.

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