Netflix prepared to defer profits to win market share


Remember the old days of the dot-com bubble, when Internet companies were willing to trade profits for market share, all in the name of building their business (and their stock price, of course). Looks like Netflix remembers. In comments at the Reuters Technology Summit in San Francisco, Netflix CEO Reed Hastings said the company is prepared to forego profits for five years in order to build its customer base to 20 million from its current 2.6 million. Netflix, which is still the leader in DVD-by-mail rentals, is battling Blockbuster, Walmart and others for market dominance. A price war has already forced the company to lower its monthly fee for rental of three DVDs at a time to $17.99 from $21.99. "We are going to fight until the death because we have to. So is Blockbuster," Hastings said. Netflix's battered stock closed down 11 cents after Hastings' comments. Looks like investors remember the bubble, too — and they haven't forgotten how it burst.