In the last six months, we have seen a number of large buyout offers, many of which investors believed were impossible. We’ve seen offers for Dell Inc. (NASDAQ:DELL), Best Buy Co., Inc. (NYSE:BBY), and also Sprint Nextel Corporation (NYSE:S), all three large, but especially Sprint and Dell with market caps over $20 billion. Therefore, the M&A scene is full of possibilities and large deals are in works. This leads me to wonder if Netflix, Inc. (NASDAQ:NFLX) may be attractive to any potential suitors.
The Competitive Streaming Business
In one year, Netflix, Inc. (NASDAQ:NFLX) has increased in value by 150%. The company is involved in the video streaming and DVD rental businesses. During its last quarter it grew 17% year-over-year (yoy) and is projecting up to 30 million total members by the next quarter. The company has the greatest presence in the streaming business with various content deals and continues to produce growth.
Netflix, Inc. (NASDAQ:NFLX) is in an industry that is loaded with competition. Its largest competitors are Hulu, Coinstar, and Amazon.com, Inc. (NASDAQ:AMZN), but then AT&T Inc. (NYSE:T), Google Inc (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL) are just around the corner in the streaming business. Yet still, all are chasing Netflix, and as a result, there is a great deal of opportunity in both advertising and in business expansion for Netflix as an acquisition target.
Netflix & its Unlikely Suitor
Netflix trades with a market cap of $9.10 billion, so although it would be a large acquisition, it’s not outside the realm of possible when you consider other large acquisitions. In the past Netflix, Inc. (NASDAQ:NFLX) has been considered a potential acquisition of Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Google Inc (NASDAQ:GOOG). While all three are possible, and make sense, I think another likely suitor is Yahoo! Inc. (NASDAQ:YHOO), a company that could show interest.
On Thursday, Yahoo announced that it had gained exclusive rights to Saturday Night Live’s 38-year archive. The deal sounded strange, like something we would’ve seen from Netflix, Inc. (NASDAQ:NFLX) or Amazon.com, Inc. (NASDAQ:AMZN), yet it caused us to remember that Yahoo! does have a presence in the online video business.
It is estimated that Yahoo! Inc. (NASDAQ:YHOO) served 331 million videos to 43.6 million unique visitors in the U.S. in February. However, Yahoo! Inc. (NASDAQ:YHOO) has virtually no mobile reach, which is where Netflix, Inc. (NASDAQ:NFLX) comes into play, as it has both the presence and the technology to excel in both the mobile/tablet space. So while the partnership may sound unlikely, it actually makes sense and could lead to a great deal of synergy between the two companies.