Amazon-Netflix Deal In The Making?
Netflixshares shares were up nearly 6% Wednesday on rumors that Amazon.com is interested in buying the DVD rental-by mail company. Adding to the Wall Street heat, Jackson Securities Analyst Brian Bolan said that this is the right time for Amazon to cash in some of its highly valued stock to buy Netflix, whose stock has been under pressure from stiff competition. Bolan's estimates Netflix could cost Amazon over $1.5 billion.
What's the appeal? Both Amazon and Netflix are desperately fighting to maintain their share of the DVD market-- Amazon sells, Netflix rents -- in face of a whole new slew of options. Netflix's by-mail model looks absolutely archaic in contrast to super-fast video-on-demand from cable companies like Comcast. And then there's also the competition from the likes of Apple's iTunes and even BitTorrent's new subscription service. And Amazon has to figure out how to deliver faster than the US. Postal service as well. Here's some interesting analysis: www.bloggingstocks.com. Email me to tell me what you think of this potential deal!
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