Barnes & Noble Inc. (NYSE: BKS) shares have outperformed Amazon.com Inc.’s (NASDAQ: AMZN) this year, and have done so by a wide margin. Either Wall Street has warmed to the brick-and-mortar model of the nation’s largest bookstore chain, or e-commerce has lost some of its charm.

Since the start of 2014, Barnes & Noble’s shares have advanced over 50%, while Amazon’s have fallen 20%. Some of the drop off in Amazon’s stock is due to disappointment about its inability to make money. CEO Jeff Bezos is known for caring more about growth and innovation than the bottom line. Alternatively, Barnes & Noble’s best efforts at innovation are almost certainly behind it. It launched its Nook e-reader and tablet to compete with the Amazon Kindle. The Barnes & Noble products posted mediocre sales. The company has done little since then, except through restructuring.

And Barnes & Noble has restructured its core businesses quite a bit. It has started to sell Samsung tablets in the hope of improving Nook performance. In theory, the deal should cut Barnes & Noble’s costs as it moves away from manufacturing. At the time of the launch, the two companies stated:

This new co-branded tablet offers the best of both worlds: the first-ever full-featured Android tablet optimized for reading. The Samsung Galaxy Tab 4 NOOK is now available in more than 660 Barnes & Noble bookstores and online at http://www.bn.com and http://www.nook.com for $179 after a $20 instant rebate, and includes more than $200 in free content from the NOOK Store including bestselling books, popular TV shows, top magazines and more.

Barnes & Noble also set a deal with Google Inc. (NASDAQ: GOOG) for same day delivery of books. But Barnes & Noble has not disclosed whether the program has helped it.

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Barnes & Noble’s most radical re-engineering involves pulling its traditional business away from its newer one:

With the objective of optimizing shareholder value, the Company’s Board of Directors has authorized management of the Company to take steps to separate the Barnes & Noble Retail and NOOK Media businesses into two separate public companies. The Company’s objective is to take the steps necessary to complete the separation by the end of the first quarter of next calendar year.

However, none of this effort has done much to aid Barnes & Noble’s P&L. In the final quarter of last year, revenue ticked up slightly to $1.3 billion. However, the company lost $37 million.

Despite rapid growth, Amazon has lost money as well. In the most recent quarter:

Net sales increased 23% to $19.34 billion in the second quarter, compared with $15.70 billion in second quarter 2013. Excluding the $237 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 22% compared with second quarter 2013.

And:

Net loss was $126 million in the second quarter, or $0.27 per diluted share, compared with net loss of $7 million, or $0.02 per diluted share, in second quarter 2013.

The situation is not expected to get better in the short term:

Third Quarter 2014 Guidance

• Net sales are expected to be between $19.7 billion and $21.5 billion, or to grow between 15% and 26% compared with third quarter 2013.
• Operating loss is expected to be between $810 million and $410 million, compared to $25 million in third quarter 2013.
• This guidance includes approximately $410 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

For any investor expecting a bottom line turnaround at Amazon near term, the prospects are weak.

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Defenders of Amazon and its model could make one claim that is hard to overcome and makes the advance of Barnes & Noble’s shares less impressive. That is that Barnes & Noble’s shares could not fall much further. And that is a fair assessment. Over the past five years, the S&P 500 has advanced 100%. Barnes & Noble shares are barely flat, and Amazon’s have risen 300%. Viewed over the long term, Barnes & Noble has been a disaster.