Microsoft constantly works to acquire new ventures and produce something new in the market. No doubt, Microsoft has been acquiring new companies very quickly. The software giant is planning to acquire Netflix in 2023.
Microsoft is one of the learning tech companies in the world. Microsoft is an American Multinational technology corporation that produces consumer electronics, computer software, personal computers, and related services.
Here, it is imperative to mention that Netflix is an American subscription-on-demand over-the-top streaming service. The company is located in Los Gatos, California.
The aim behind Netflix is to entertain the world. Whatever your taste is, no matter where you live. It provides access to best-in-class TV series, documentaries, and movies.
Moreover, it also provides a wide array of award-winning TV shows and anime. However, if w walk about Microsoft’s acquisitions, the first step was the $2.5 billion acquisition of the popular video game Mine craft.
Later, Microsoft purchased LinkedIn for $26 billion and Nuance, a speech recognition and Artificial Intelligence maker, for $ 20 billion. Furthermore, with $69 billion, Activision Blizzard was the primary target.
On the other hand, Microsoft is battling American Trust Regulators to acquire the company that created the call of duty.
Hence, it has been a source of regulatory concerns about market dominance as it now shares the same roof as the Xbox gaming console.
Even if Microsoft loses the video game business due to market competition, owning Netflix will still be a wise strategic move and make it simpler to sell in Brussels or Washington.
Besides, both companies possess a strong position in the market. Netflix chose Microsoft as its advertising partner for the upcoming ad-supported subscription service, Brad Smith. Similarly, Microsoft’s president is also a member of the Netflix board.
The main objective behind the deal is that Microsoft wants its video game streaming services to be available on multiple devices.
On the other hand, Netflix has an excellent and extensive gaming plan. Reed Hastings, co-leading the company, bought Spry Fox, a developer, to become its sixth studio. The ambitions behind the deal would be accelerated if Microsoft became part of their empire.
However, it is very simple to envision a package that combines streaming TV and video games. Indeed, the market value of Microsoft is 13 times that of Netflix.
Microsoft is a tech giant and can afford as much as $1.8 trillion as of December 1. The Netflix enterprise would be worth nearly $190 billion if evaluated at a 30% premium. Though, It is pretty challenging to find significant cost savings.
After getting the tax of $8 billion in an operating profit, analysts expect Netflix to generate a massive return on investments of nearly half of its 8%weighted average capital cost in 2024.
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