Netflix’s shares have started soaring 13% higher on Friday as a lot of speculation has been roaming the internet that Microsoft was about to make a big for the streaming video provider. The spark for all of this goes way back to when Netflix CEO Reed Hastings decided that he would step down from the Board of Directors of Microsoft. That said, if Microsoft were to plan to bid on Netflix, it is only obvious that the CEO of the target company can not be sitting in the boardroom of the possible acquirer and listening to secret after secret of their strategic plans on how to do so.
It is definitely in the realm of possibility that there were a plentiful amount of other reasons as to why Hastings departed. The drop in Netflix shares by more than 50% since the beginning of the year has made the company a much more better value for the company interested in buying it. With Netflix having a market cap of $3.7 billion, the video streaming company is certainly an affordable purchase for Microsoft who just happens to be sitting on a throne of $66 billion in cash and equivalents of the latest quarterly report released from them. Heck, that’s like going to the dollar store and picking up a toy whistle for a child.
The question is though, why would the Redmond based Microsoft be so interested in Netflix? I really think that it may have to deal with something surrounding the Xbox 360 with Microsoft trying to turn the gaming console into a home entertainment system. This could also be Microsoft’s way of trying to counter and compete with Google’s ownership of YouTube which has become a very huge thing on iOS and Android smartphones. Netflix can also be found on most peoples smartphones as well, so purchasing Microsoft would be a fantastic way to continue reaching millions of smartphone users. There are also quite a bit of users that have Netflix on the Xbox 360 as well, so there would be no doubt that this could be related as well.
Info about all of this is really scarce. As you can imagine, a lot of this is behind closed doors as Microsoft plans the bid, but it would really be interesting to find out what exactly is going on. Besides, Microsoft purchasing Netflix could potentially be really good for the service itself too. Microsoft does a really good job creating a quality product, and I think that if they were to get their hands on Netflix, we could see some better integration with Windows services. Nevertheless, whether Netflix gets purchased by Microsoft or not, either way the service heads it is only bound to improve and get better as time goes on.
We’ll just have to see how the acquisition goes if Microsoft does end up purchasing the company.
Do you think that Netflix has a lot more potential on its own, or do you think it could go to new levels if Microsoft were to purchase the company?
source: phone arena