In an attempt to focus on his own ailing firm, Netflix
(NASDAQ:
NFLX
) Chief Executive Reed Hastings announced that he will no longer
serve on Microsoft's (NASDAQ:
MSFT
) board. "Reed has been a terrific board member, and his insights
and experience have really helped guide us through a critical
period of transformation for both Microsoft and the industry,"
Steve Ballmer, CEO of Microsoft, said in a
statement
.
"I'm thrilled to have served on the board at such a pivotal
time for Microsoft, including the development of Windows 8,
Windows RT and Microsoft Surface, which will bring exciting new
opportunities for customers and the industry as a whole," added
Hastings.
Hastings, who currently serves as the company's lead
independent director, joined Microsoft's board in March 2007. He
said that he is leaving to "reduce the number of boards I serve
on, so that I can focus on Netflix and on my education work." But
if he wants to focus on Netflix and his education work, why did
he choose to join Facebook's (NASDAQ:
FB
) board last year?
The answer might involve the future of both firms as well as
Microsoft. While the relationship between Netflix and Microsoft
is relatively minor (ex: Xbox 360 users can download the Netflix
app), Facebook could be a critical part of Netflix's long-term
social media strategy. The company would love to fully integrate
its streaming video service with Facebook, but it is
not currently allowed to do so
in the United States.
There have also been rumors that Facebook will acquire a
portion or all of Netflix to bolster its own streaming video
efforts.
Meanwhile, Microsoft has been
working
with Barnes & Noble (NYSE:
BKS
) on a strategic partnership. Thus far, the focus has been on
books. But the two entities formed a new subsidiary for digital
content, Nook Media LLC, which could one day offer a
Netflix-style service for movie rentals. In the meantime, Barnes
& Noble is building a service that
sounds very similar
to iTunes.
If Microsoft intends to increase its efforts to compete with
Netflix -- either directly or through its partnership with Barnes
& Noble -- there could be a conflict of interest for Hastings
to stay on Microsoft's board. That may have provided him with
another reason to leave.
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