Rumor: Amazon May Acquire Netflix For Over $1 Billion; NFLX Shares Rose Yesterday

Posted Jun 7, 2007, Inc. (NASDAQ:AMZN)[1] is rumored to be considering an acquisition of Netflix, Inc. (NASDAQ:NFLX)[2].  Yesterday, Netflix share prices gained $1.06 (5%) to $22.45.  Netflix’s shares have been struggling due to intensity of rivalry from other mail movie distributors such as Blockbuster Inc. (NYSE:BBI)[3].  Brian Bolan, a Jackson Securities[4] analyst heard about the speculation of the buyout from industry contacts.

In regards to Amazon, Bolan stated “They’ve got excess currency, if you will. Netflix, on  the other hand, has been facing stiff competition from Blockbuster and everyone  else, so they’ve seen their stock go lower.”

From a supply-chain management point-of-view, the potential synergy between Netflix and makes total sense.  Amazon has an online video streaming service called Unbox and Netflix has a similar service called Instant Movies Online.  If were to acquire Netflix, they would gain Netflix’s subscribers and add be able to add more to the movie inventory.

The founder of Netflix is Reed Hastings and he serves on the Board for Microsoft as well.  Jeff Bezos also interacts with Microsoft often as his company, is based in Seattle, Washington.  As more information is disbursed about the potential acquisition, Pulse 2.0 will write about it.  Keep checking back often.