Rumors: Netflix could be the new acquisition of Microsoft

Microsoft is unlikely to stop acquiring firms or studios despite the hundreds of problems caused by the Activision Blizzard merger. Apparently, the internet giant has its finger pointed on Netflix next in its quest to dominate the market.

Reuters reports that since Satya Nadella became CEO in 2014, he has invested heavily in startups like Mojang, LinkedIn, and Nuance, spending billions of dollars in each. As Reuters puts it, "the Netflix merger would make strategic sense and would undoubtedly be an easier sell in Washington and Brussels" than the Activision Blizzard deal.

As part of its effort to develop a new ad-supported subscription system, Netflix selected Microsoft as its advertising partner. Not only that, but the streaming service counts Xbox head Brad Smith among its board of directors. Given both firms' commitment to the gaming sector, an acquisition of Netflix would make perfect sense. Although Xbox has xCloud available for game streaming, Netflix has recently bought a number of mobile studios and is planning to enter the market for Triple-A console and PC games.

Microsoft is worth $1.8 trillion, giving them the financial wherewithal to pay $190 billion to acquire Netflix. The rate of return on investment would be somewhat low compared to comparable businesses, but Nadella has proven in the past that he can defy market convention. However, as of this writing, there are no signs that the corporations have initiated talks that could lead to a combination of their operations. Meanwhile, Microsoft will keep trying to have the acquisition of Activision Blizzard approved. It is recently encountered new challenges in the shape of legal actions.