Netflix to Merge With Amazon?

Netflix created separate DVD by mail and streaming units so Netflix could be sold to Amazon, argues Wedbush Securities analyst Michael Pachter. Netflix formed Qwikster so it can be spun off, allowing Amazon to buy Netflix, he argues.

"In our view, Amazon has always wanted to be in the streaming business, and has been constrained from buying Netflix due to tax considerations," says Pachter. "The split up of Netflix’s business addresses the state sales tax issues raised for Amazon."

If Amazon were to acquire only Netflix’s streaming business, it could triple the size of its content library, and gain traction as an industry leader.

Netflix split to set up Amazon streaming merger?