Facebook tells Netflix: Watch your back


Facebook tells Netflix: Watch your back
Commentary: Netflix’s stock drops on Facebook’s offensive
NEW YORK (MarketWatch) — Facebook is putting a big scare into Netflix Inc. and its stockholders. The social-media kingpin has struck a deal with Warner Brothers to distribute films.

This is serious. If Netflix /quotes/comstock/15*!nflx/quotes/nls/nflx (NFLX 195.95, -11.45, -5.52%)  doesn’t watch its back, Facebook could do it what Netflix did to Blockbuster Inc. /quotes/comstock/11i!bloaq (BLOAQ 0.11, +0.00, +1.92%) : make it irrelevant in the digital age.
Underscoring the palpable concern in Netflix Nation, shares were down nearly 4% in Tuesday-morning trading. The company’s stock has been dropping since Feb. 11 on worries that competitors — Amazon.com Inc. /quotes/comstock/15*!amzn/quotes/nls/amzn (AMZN 167.68, -1.40, -0.83%) , perhaps — could cut into its market share. Read “Facebook-Warner Bros. deal hits Netflix shares.”

The initial example of the partnership will allow consumers to purchase “The Dark Knight” for rental on Facebook. Facebook will then grab a percentage of the sale.

Can anybody really be surprised? Social media, exemplified by Twitter and Facebook, is all the rage. Just as Netflix became a part of the popular culture in America, Facebook and Twitter have ingrained themselves in our lives. This move seems like a logical next step. MarketWatch Topics: Facebook.

Does Netflix see it this way, though? The company has a smart, aggressive management team. It is usually forward-thinking in its approach. For now, though, Netflix would be wise to look over its shoulder at the oncoming train called Facebook.
http://www.marketwatch.com/story/facebook-tells-netflix-watch-your-back-2011-03-08

Comments