Netflix Could be Aquired by Amazon?

Hmm it made the stock shoot up but it would make sense for both companies to join forces.

But combined, the two would offer a very formidable combination. The reason is that while Netflix mostly offers older titles through its streaming service, Amazon offers all the new movies. Netflix of course sends out new movies via DVD by mail, but that service will one day go away in favor of streaming or downloading.

Another thing that could be a result of the pairing is that they can create synergies in their distribution networks if they consolidate with one another. That means you might be able to buy stuff on Amazon from an Xbox360 (maybe even using Microsoft points) or maybe from kiosks if Netflix decides to directly compete with Redbox. Also consolidating their fulfillment centers might make for millions in savings on shipping as well.

Amazon On the Comeback

The best part about this story is there margins are finally going up a bit after tightening for years:

One of the most watch Amazon metric its margins, which is a measure of
how much it profits from the sale of an item.

According to Citigroup analyst Mark Mahaney, Amazon's operating
margin for the quarter was 5.9%, which is "materially higher" that what Wall
Street expected and the result of a more positive contribution from Amazon.com's
international sales.

"This marked the first quarter of year-on-year margin expansion
since the second quarter of 2004," Mahaney said, in a note to clients. He rates
Amazon as a sell.

It is also interesting to see how much of there sales ($1.4 billion for overseas and $1.62 billion from US) is now coming from overseas. A weak dollar might be able to boost Amazon's bottom line going forward.