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Rumors of Amazon buying Netflix fueled by Apple

updated 08:55 am EST, Wed December 23, 2009

Amazon may hedge against Apple tablet

Rumors that Amazon might buy Netflix sparked brief but sharp spikes in shares of both companies yesterday. While the sources of the rumor aren't known, talk of an acquisition was allegedly sparked by Apple's supposed iTunes TV subscription plans and their potential impact on both companies. Amazon in particular would seek to bolster its Video On Demand service by acquiring one of its largest competitors, which thrives primarily on subscription-based movie and TV season rentals.

For Netflix, the rumored deal would give it the advantage of a prime web portal. Neither Amazon nor Netflix has commented on the authenticity of the rumor.

Besides supplementing Amazon VOD, which is currently limited to per-title purchases and rentals, an acquisition would serve as a hedge for Amazon against an Apple tablet should it decide to supplement or replace the Kindle with a color model capable of video. The company has publicly said that a color e-book reader was years off but has also assumed it would use e-paper, which as of now often doesn't produce adequate color and is too slow to handle video. The rumored Apple device would not only be a video hub but also an e-book alternative thanks to a 10-inch touchscreen.



By Electronista Staff
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Comments

  1. lkrupp

    Junior Member

    Joined: May 2001

    +4

    The process...

    Apple acts, others react out of fear or confusion. "What are those crazy s********s at Apple going to do now?" We better do something, ANYTHING, before they go after our bread and butter. But what to do? BUY something! That might make us look like we know what's coming.

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    -3

    Apple stock seems to be crapped out...

    It might be of benefit if Apple used some of its cash reserve to buy itself a useful company instead of trying to do everything within the company. That's why Google and Amazon's share prices keep constantly moving up and Apple's share price is standing still. I'm guessing investors think that companies that try to rapidly expand their businesses are a better investment. Apple may need to get away from trying to make money totally from selling hardware. It's present software offerings seem to be doing nothing to bring in considerable cash flow.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +3

    Re: The process

    That's right. Everyone just watches apple and 'reacts' to it, even though you can't watch apple, since apple doesn't let anyone know what they're doing. So, in effect, all these people are just reacting to the rumor that Apple might be doing something. Yes, that's it.

    Or, just as likely, some analysts came up with the idea that maybe Amazon should look into buying Netflix in order to take on Apple. And then some people repeated it and the next thing you know, the rumor's flying all over the place.

    Or, even more likely, some brokers and stock manipulators started spreading the rumor that this was going to happen, which, in turn, would bump the price of the stock and then they could make a killing. Then they could start spreading the rumor that talks have died, and make another killing selling short.

    Nah, that would never happen in the market. It must be a true rumor of Amazon 'reacting' to Apple.

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