netflix_logo.gifThe latest company acquisition rumor to hit the internet, according to Businessweek, is the potential purchase of Netflix by Amazon. As part of the deal, Amazon Unbox would be merged with Netflix’s own movie rental download service.

Netflix recently has been weakened by Blockbuster’s Total Access plan. Amazon’s Unbox has never really captured an audience, mainly because of its awkward interface. By purchasing Netflix, Amazon would get a built in user base to market an improved download service.

Amazon’s stock declined on the news, maybe because investors doubt the longterm market for video downloads or rentals.

Having tried both Amazon’s and Netflix’s attempts at video on demand, I would say that Netflix currently has a leg up by offering consumers the choice of renting a physical DVD or streaming a movie. Interestingly, both companies have agreements with Tivo to stream movies to a consumer’s Tivo box.

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