The Nook Tanked: Will Barnes & Noble Follow?

The future of the the e-reader looks grim, but the devices are not dead and buried just yet — although the industry owes more thanks to Amazon (NASDAQ:AMZN) than to Barnes & Noble (NYSE:BKS).

Before Apple (NASDAQ:AAPL) launched the iPad in 2010, tablets were primarily a novelty for the technologically savvy. But since its release, more than 120 million of the devices have been sold, and the entire computer industry has been shaken to its core.

Amazon has successfully ridden this changing technology wave. The Internet retailer notoriously does not release its sales figures, but its Kindle e-reader has become a market leader after fighting neck-and-neck with Barnes & Noble’s Nook in its early days. Much of the device’s success is owed to its ties to Amazon’s Prime Instant Video and cloud storage offerings. But even the popularity of the Kindle is expected to fade; after all, a tablet, with Internet, email, and a variety of applications, can boast much more functionality than an e-reader.

But Barnes & Noble has felt the fading e-reader popularity much more severely than Amazon, a fact evidenced prominently in its fiscal third quarter results. The bookseller warned early this month that sales of its e-readers would be disappointing, and they were. Barnes & Noble reported Thursday morning that sales in its Nook division dropped 26 percent to $316 million for the quarter, compared with revenue of $426 million in the year-earlier period. The drop was primarily attributed to lower-than-anticipated sales…