There are a lot of businesses that get written off, not just because they're in trouble but because some other business failed. We announce the death of Best Buy because Circuit City bit the dust. Facebook is going to fall apart any day now -- remember MySpace? Barnes & Noble (NYSE:BKS) is going to fall to the (NASDAQ:AMZN) sword, just like Borders did. That's not a fair way to think about things, though. These companies might make it or they might die off, but it says something good about them that they've outlasted the competition. Today, I want to look at the potential that maybe, possibly, Barnes & Noble won't go out of business.

The value and failure of the Nook
Barnes & Noble's biggest success and its biggest failure have come from a little device that lets you read books. The Nook was developed as an e-reader, but quickly went on to tablet fame. Microsoft and Pearson both invested in the division last year, briefly valuing the fledgling business as high as $1.8 billion.

But Barnes & Noble simply couldn't compete with the overwhelming number of devices on the market. Apple's iPad is dominating the scene, taking more than 40% of the entire market in the third quarter this year. While the e-reader continued to do well, the tablet never took off, sucking down cash as it went.

When Barnes & Noble decided to kill off its in-house Nook production this year, the market hit the company hard. The stock is down 16% from the time of the announced death. As the tablet division slowly disappears, it's still dragging the business down, and last quarter it put a $55 million EBITDA loss on the balance sheet.

Barnes & Noble's retail division
While the Nook is dying, the company's retail business has shown some strength. Last quarter, Barnes & Noble's retail business earned $1 billion in revenue, which was a 10% decline from the previous year. It cited a tough comparison for year-over-year revenue -- last year Fifty Shades of Grey and The Hunger Games gave the company a boost -- but the fall was sharp, nonetheless.

So if the Nook is out as a tablet, retail sales are down, and the college business is growing slowly, what's left to love at Barnes & Noble? Why will it survive when Borders went down so easily?

Standing out from the crowd
Barnes & Noble is the only major book retailer with a physical presence. The domination of Amazon is impressive but not complete, and consumers still buy things in stores. Take a look at the holidays. Forecasts for this year are for Americans to spend $602 billion this holiday season -- of that, just 14% will be made online.

Having a physical bookstore to visit is all Barnes & Noble has going for it, but it's a huge thing. In my view, the company's future can be secured if it can manage its occupancy costs, shrink its footprint, and keep offering Americans a place to browse and buy books. Right now, rent is cutting deeply into the bottom line and the company took a 40-basis-point hit on increased occupancy costs last quarter.

If Barnes & Noble can manage that, it can take the unique position that it holds and start to grow once again. For now, the company needs to continue managing costs, finish off its Nook transition, and hope for another big trilogy for teenagers or housewives.