Wed, Jun 6th 2007 2:17pm
The rumor that Amazon could buy Netflix is an old one, but it's getting some fresh attention today, following a note on the subject from a Wall St. analyst. Given that Netflix shares are slumping while Amazon's are soaring, it's not surprising that people are again talking this up. But what's most interesting is one of the reasons given by a Bank of America analyst on why the deal might not be in the offing. If Amazon were to buy Netflix, it would immediately gain a physical presence in 43 states, because Netflix has so many distribution centers. Hence, Amazon would likely be forced to charge buyers in those states sales tax, which something the company definitely doesn't want to do. For any deal to go through, Amazon would have to figure out a way to sidestep this issue, possibly by drastically consolidating these distribution centers; except that if this could be done without damaging the speed of the service, it would've probably been done already.
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