After the partnership between the streaming service and the tech giant, one analyst believes Microsoft may be in a position to purchase Netflix.
We learned a few days ago that Netflix had partnered with Microsoft to launch its next ad-supported product. When it launches the lower-cost option, the streaming service stated that Microsoft would be its “global technology partner and advertising sales agent”.
Ted Sarandos, Netflix’s co-CEO, confirmed that Netflix would soon launch a new advertising format. We now know that Microsoft will handle advertising. This new, cheaper ad format should help Netflix attract more people to its platform. However, such a close relationship with Microsoft could conceal greater ambitions.
Microsoft would be approached by Netflix to acquire the company
Analysts believe that Netflix wouldn’t have chosen Microsoft to be its advertising partner, and that the US company would seek to gain more information about the giant in the interest of a takeover. Laura Martin, senior analyst at Needham did speak on the deal with Yahoo! and suggested that Netflix may have bigger ambitions, including the possibility of establishing a friendly relationship to Microsoft and possibly opening the door for the actual acquisition.
She stated that no other company could have partnered Netflix with to complete the $100 billion acquisition the company required for regulatory or financial reasons. Martin stated that Netflix may be seeking a release. “Netflix may be trying to contact Microsoft in the hopes that Microsoft will buy Netflix after it has completed its acquisition of Activision.”
Netflix has been struggling financially in recent months since the company announced that it had lost subscribers, for the first time ever since 2011. Netflix confirmed that it anticipates losing millions of subscribers over the next few months. Microsoft acquisition could ensure that Netflix is able to continue developing and creating more original content.