Amazon wanting Netflix: crazy?

http://www.latimes.com/business/la-fi-amazon-netflix14-2009jul14,0,2928560.story?track=notottext

by Anon84 • 17 years ago

11 19 17 years ago

mgenzel3• 17 years ago

Am I the only one who's thinking about pricing of this deal?

Netflix market cap: $1.8 billion Amazon market cap: $35 billion

Wrt future prospects, Netflix is not dying, but is in fact at the forefront of digital delivery. They won't sell it cheaply. It would be one very-very expensive purchase.

mediaman2• 17 years ago

Depends. Many shareholders may be willing to take a 30-40% price premium, particularly in this market -- and that would raise their price to $2.3bn to $2.5bn, which, if $1.8bn is a steal, is still a good deal.

brown9-22• 17 years ago

Netflix's current market cap is actually $2.5 billion: http://www.google.com/finance?q=netflix

mgenzel3• 17 years ago

Yikes. You've undermined my faith in the Google quick answers. I should be more skeptical, should've looked at the source.

Still, the point stands even more firmly :) I suppose I don't think it would be worth that much to Amazon, proportion-wise.

elq4• 17 years ago

Yes. The sales tax consequence to amazon is huge. I really don't know why these rumors keep popping up every couple of years. Perhaps it's because Werner Vogels spoke at our weekly tech talk thing?

mediaman2• 17 years ago

Interesting. How many states does Netflix have tax nexus in? Amazon already has DCs in ten states.

elq4• 17 years ago

there are 58 dvd distribution centers or hubs. most states have at least one.

brown9-22• 17 years ago

Can you expand on what these consequences are a bit for those of us unfamiliar...?

elq4• 17 years ago

Netflix has facilities in most states. Amazon would have to collect sales tax in most (if not all) of these states.

http://kara.allthingsd.com/20090714/amazon-buys-netflix-micr...

ja27• 17 years ago

I'm sure that Amazon sees the internet sales tax loophole coming to an end. As states get more desperate for tax revenue, they'll be pushing hard to require internet sellers to collect and pay sales tax.

I don't know that this makes the Netflix rumor any more likely, but you can't just dismiss it based on sales tax implications.

foulmouthboy• 17 years ago

I don't think it's so crazy. A solid digital delivery system would be a great compliment to the Amazon Cloud. Beyond digital delivery, I would think that Amazon would be able to make some great use out of the Netflix recommendation system.

leviathant• 17 years ago

I think it's no coincidence that this news came out after Netflix awarded the winner of their Netflix Prize for increasing the accuracy of prediction.

Aron2• 17 years ago

It's coincidence. The contest has almost no implication to Netflix as a business.

Aron2• 17 years ago

My conspiracy theory: Options expire on friday. Watch the stock deflate next monday.

Amazon wanting Netflix: crazy?

Related Stories