Search giant Yahoo!, which has been struggling in recent years thanks to the Google juggernaut and the rise of other competitors like Microsoft's Bing, is the latest company linked to a possible purchase of Netflix, the over-the-top video company.
Netflix, whose majority of customers subscribe to the company's streaming video service, announced this week that its subs watched a mindboggling 2 billion hours of Web video in the fourth quarter of 2011 alone. That fueled a hike in the company's stock price of more than 11 percent, which in turn fueled speculation that Netflix might now be more attractive as an acquisition target. One such speculator is Piper Jaffray analyst Gene Munster, who told MSNBC, "In the back of my mind, I wonder if [Yahoo!] buy Netflix; that would make a lot of sense."
Netflix took a bath on Wall Street and in the court of public opinion last year when it raised the price of its DVD+streaming plan by 60 percent and then announced a plan to separate the two businesses, which it soon realized was a bad move. The company's stock price plummeted from $300 in July to $70 in December, but Wednesday's surge might make it more attractive to a potential buyer. Yahoo!, which just this week announced the appointment of a new CEO, PayPal's Scott Thompson, could really benefit from getting into the streaming content biz.
BTIG analyst Richard Greenfield said if Netflix's estimates are correct, that means the company drew more viewers last quarter than cable networks FX, CNN, MSNBC and more, according to Variety. If Netflix were a TV network, it would be the 15th most watched, Greenfield said. And that's among all households; Netflix beats everyone except CBS in homes that subscribe to the service.
