Shares of Barnes & Noble (BKS), the beleaguered book retailer that is mulling a takeover bid from billionaire John Malone, were down in early trading Tuesday after the company reported quarterly results that lagged analysts' estimates.

The company lost $57.6 million, or $1.08 a share, in the three months ended April 28, versus a loss of $59.4 million, or $1.04 a share a year ago. Revenue rose 0.4% to $1.38 billion. Wall Street analysts expected a loss of 92 cents a share on revenue of $1.48 billion.

Barnes & Noble has bet its future on the Nook e-reader, which saw sales slump 11% in the last quarter to $164 million, even though reviewers liked the new Nook Simple Touch with a built-in LED light that enables people to read in the dark. Nook has about a 27% share of the market,  less than half of the 60% share held by Amazon's (AMZN) Kindle.   Many experts believe that the company can do better. Barnes & Noble does as well.

"We grew our business in 2012 while continuing to make the necessary investments for the future of the business," said Barnes & Noble CEO William Lynch in a press release.  "As we look out to fiscal 2013, we feel the company is strategically well positioned to grow value for shareholders."

Microsoft (MSFT), which Monday unveiled its Surface tablet computer, agreed in April to invest $605 million over the next five years in Barnes & Noble's Nook and college businesses. (Microsoft owns and publishes Top Stocks, an MSN Money site.) Malone, who rescued Sirius XM Radio (SIRI) from bankruptcy, is now interested in riding to the rescue of Barnes & Noble. In May, he made a $17 per share offer for the New York company, which began looking for a buyer last year.

Barnes & Noble's backers are motivated by their desire to loosen the grip that Amazon has on the digital book business. The Seattle e-tailer has grown more powerful in light of the U.S. Justice Department's antitrust battle against publishers for allegedly fixing prices in the e-book market. The publishers may have joined forces to counter Amazon's pricing power -- and Barnes & Noble's to a lesser extent.

Believe it or not, one of the book company's bright spots was its retail business. Sales for the quarter were $1.1 billion, up 0.5%. On a comparable basis, sales jumped 4.5% as the company benefited from the liquidation of its one-time rival Borders, strong Nook sales and the strength of best-sellers such as "The Hunger Games" and "Fifty Shades of Grey."

Call me hopelessly old-fashioned, but I believe that there will always be a place for book stores. There is nothing like browsing through shelf after shelf of the latest titles and thumbing through the magazine racks. Often, I take some reading material to the adjacent coffee shop and decide what to purchase while sipping on coffee with enough caffeine to stun an elephant.

During a recent trip to a Barnes & Noble, I realized that the ambiance hasn't changed much over the years, except that people are now comparison shopping with their smartphones while enjoying their beverages. They often realize, however, that the book they were planning to buy at the bricks-and-mortar store can be had cheaper online. The poor baristas spend quite a bit of time collecting unsold merchandise piled onto tables.

Barnes & Noble shouldn't take Malone's money and run for the exit. It should do a 50-yard dash.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jberr.