Amazon + Netflix Rumors (again)

If there is one e-commerce rumor that never seems to die, it is Amazon buying Netflix. I just do not see it happening, yet shares jumped again on the persistent rumors.

From my July 2009 post:

First, a deal with Netflix has been speculated for many years. The overlaps are obvious. I am sure the smart people at Amazon have investigated Netflix and determined if the addition would be a fit. To be sure, there were some synergies a few years ago. Netflix had a solid customer base and fulfillment. The advent of digital video and applications like Amazon Unbox and iTunes have shown that the digital video is for real. Netflix is nice, but likely not a growth segment. Today, Amazon would have interest in the fulfillment but knows the Netflix customer base is likely to get smaller not bigger. Plus the fulfillment model is great for envelopes not for packages.

In the nearly last 12 months, Netflix has done very well in the market by more than doubling in share price. I still hold the opinion that window of opportunities for synergies is past. Amazon won’t do this deal.

Business Insider: Netflix Downgraded To SELL: Amazon Deal Won’t Happen, Says UBS

Disclosure: The wife is employed by Amazon and does not read my blog. These opinions are mine alone.