Rumor: Verizon Looking to Purchase Netflix

Last week there were rumblings that Verizon was gearing up to launch a new web-based movie and TV streaming service in direct competition with Netflix. According to the last rumor, however, it looks like Verizon has a new plan to get a piece of Netflix’s pie: buying them out.

The news comes from DealReporter, which says that Verizon is “considering” Netflix as one of its options to break into the lucrative video content streaming market. Another option that Verizon had recently been considering was Hulu, but that deal is now out of the picture as the company pulled itself off the market.

DealReporter isn’t the only source talking about a possible bid from Verizon to acquire Netflix. Porter Bibb, managing partner at Mediatech Capital, said in a TV interview (via Bloomberg) that he’s been “hearing rumblings from inside Verizon that they are very serious about either Netflix or something similar,”

Considering that Netflix’s market value is now around $4 billion, down from $16 billion from July of this year, the idea of the company selling themselves off doesn’t exactly sound out there. The company has been struggling to recover from what was essentially a mass exodus from the video content service after the company raised prices and (unsuccessfully) attempted to spin off their DVD-by-mail service. Putting themselves on the market would be at least one way to sort things out.

What such an acquisition would mean for consumers is unclear, but investors seem to be interested in the idea; Netflix shares rose 5.6% to $74.85 in afternoon trading on Monday.

[Image credit: REUTERS/Rick Wilking]