The tech goliath, Microsoft, is planning to acquire Netflix in the coming year. A major international publisher reported that Microsoft might acquire Netflix, given its recent expansion and relationship with Netflix. Microsoft’s shopping spree started with the $2.5 billion acquisition of the company behind the hit game Minecraft, followed by LinkedIn for $26 billion and the speech recognition and artificial intelligence software developer Nuance for $20 billion.
Microsoft Plans To Acquire Netflix As It Offers a Good Package with Streaming TV and Games
Microsoft’s market value is 13 times that of Netflix, and it can easily acquire the streaming giant for nearly $190 million, as reported by international media. According to Morningstar’s analysis, “After taxing the $8 billion operating profit that analysts project for Netflix in 2024, the implied return on investment would only be half its 8% weighted average cost of capital.”
Moreover, Microsoft shares a very cordial relationship with Netflix as its president Brad Smith also sits on the Netflix board. Recently, Netflix chose Microsoft as its advertising partner for a new advertising-supported subscription service which was launched to curb password sharing and to somehow stop people from unsubscribing from the streaming services due to its high cost.
Microsoft’s Activision-Blizzard Acquisition
Microsoft is looking to provide a video-game streaming service over multiple devices; hence its recent buy – Activision Blizzard – was the most prominent target with $69 billion. But, the company is fighting an anti-trust lawsuit related to the acquisition. Even if Nadella loses out on the video game company, the acquisition of Netflix will be a blessing as it will be much easier to promote to the American and European antimonopoly institutions. On the other hand, adding streaming to hundreds of millions of devices, Windows PCs, and game consoles is a pretty good proposition.
Also read: Microsoft to Acquire Gaming Giant Activision Blizzard for $68.7 Billion All-Cash Deal
