While Barnes & Noble (NYSE: BKS) stands a better chance of survival than embattled rival Borders Group (NYSE: BGP), the odds that B&N will actually grow and prosper seem far slimmer. The cutthroat competition in the bookselling business makes Barnes & Noble's most recent quarterly loss even more worrisome.

The good news is that Barnes & Noble's fourth-quarter sales increased 19%, to $1.3 billion. (Last quarter, Borders' sales dropped 15.8%, in comparison.) In addition, the company says it commands 20% of the e-book market, which could translate into $3 billion to $5 billion in sales by 2013.

Despite those lofty projections, Barnes & Noble reported a loss of $32 million, or $0.58 per share. Without the positive effects of several tax benefits, it would have clocked in even worse, at $0.89 per share.

Barnes & Noble is aggressively pursuing its electronic strategy to get a toehold in the budding e-book industry with its e-book reader Nook, but that's an expensive endeavor in a difficult economic climate. It has no choice but to be aggressive, given competition from Amazon.com's (Nasdaq: AMZN) Kindle, not to mention Apple's (Nasdaq: AAPL) iPad. Beleaguered Borders is now releasing its own simpler, cheaper e-book reader, Kobo, as well. With so many formidable opponents, neither Barnes & Noble's current market share nor its future is carved in stone.

Meanwhile, big-box booksellers such as Barnes & Noble and Borders not only compete with technologically savvy competitors, but also with their fellow bricks-and-mortar discounters. Well-known names such as Wal-Mart (NYSE: WMT), Target (NYSE: TGT), and Costco (Nasdaq: COST), all peddle the hottest best-sellers, too.

Borders is in more immediate danger of absolute failure, but I wouldn't want to invest in Barnes & Noble right now, either. B&N is in a far better position; it's still profitable on an annual basis, even though its annual profits have been shrinking. Furthermore, Barnes & Noble lacks Borders' Titanic-sized debt load, although its obligations aren't exactly the S.S. Minnow, either. Nonetheless, the idea that Barnes & Noble can generate much growth for investors in years to come seems as far-fetched as the latest fabricated memoir. Book lovers would be better off investing in a copy of War and Peace than buying into the uphill struggle Barnes & Noble and Borders must wage.

What's your opinion on the battle of the big-box booksellers? Channel your inner Tolstoy and pen your thoughts in the comments box below.