One analyst believes Microsoft could be in a good position to buy Netflix after the tech giant partnered with the streaming service to offer its new ad subscription model.
A few days ago we learned that Netflix was partnering with Microsoft for its next ad-supported offering. The streaming service said Microsoft would become its “global technology and advertising sales partner” when it launches this lower-cost option.
Netflix co-CEO Ted Sarandos confirmed a few weeks ago that Netflix would be launching a new advertising format soon, and we now know that Microsoft will be in charge of advertising. The arrival of this new cheaper ad formula should allow Netflix to convince more users to subscribe to its platform, but such rapprochement with Microsoft could also hide greater ambitions.
Netflix would approach Microsoft for acquisition
An analyst believes that Netflix would not have arbitrarily chosen Microsoft for its ads, as the US company would try to get closer to the giant with a view to a takeover. Laura Martin, senior analyst at Needham, did indeed speak about the deal with Yahoo and suggested that there may be bigger ambitions here, namely the ability for Netflix to position itself for a friendly relationship with Microsoft and potentially open the door to the actual acquisition.
According to her, no other company Netflix could have partnered with could complete the $100 billion acquisition that the company needed for financial or regulatory reasons. “Netflix may be looking for a release,” Martin said. “Netflix is trying to approach Microsoft in the hope that after Microsoft has processed its acquisition of Activision, Microsoft will turn around and then buy Netflix.”
As a reminder, Netflix has struggled financially in recent months after the company announced it had lost subscribers for the first time since 2011. Netflix also confirmed that it expects to lose millions more subscribers in the coming months. Acquisition by Microsoft could therefore ensure that Netflix continues to develop and create even more original content.
She works as an editor at Research Snipers.