Amazon To Purchase Netflix?

Posted Tue Jul 14, 2009 at 01:10 PM PDT by

Stocks have seen a surge at the rumor of takeover.

There’s quite a bit of talk about the purchase of Netflix, a video service that has grown substantially since it first started in 1997 and has seen significant increases in membership since the introduction of their streaming service. Of course, when one company is doing well, everyone else naturally wants to get a piece of that success. Enter Amazon.

Essentially the Wal-Mart of the internet, Amazon parlayed an online book store into one of the biggest shopping sites on the net today. They offer products ranging from the aforementioned books to pacifiers, Blu-ray players, clothing, music, and even video on demand. Could it be that Amazon is looking to expand even further?

Industry analyst Michael Pachter says no, and all because of sales tax. “Suddenly in a whole bunch of states Amazon finds itself taxable, it would kill their core business.” That doesn’t seem like a huge deal to most of us, but recently Amazon stopped ads in several states to avoid having to pay sales tax. More taxes mean higher prices, and that’s not what Amazon is about.

Analysts agree that Netflix does seem to be in the position to be taken over, but the question is when, and by whom.

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Tags: Industry Trends, Amazon, Netflix (all tags)