Is This Why Reed Hastings Left Microsoft?
It's now been 14 months since Netflix CEO Reed Hastings stepped down from Microsoft's board of directors, but we're still not any closer to finding out why he left the tech titan, where he could have conceivably been a CEO candidate to replace Steve Ballmer.
"I've decided to reduce the number of boards I serve on, so that I can focus on Netflix and on my education work," he offered up in the original press release.
Focusing on Netflix has certainly helped. Shares of Netflix have more than quintupled since Hastings revealed that he wouldn't be seeking reelection for his seat on Microsoft's board. However, the fact that Hastings didn't leave any of his board appointments outside of Mr. Softy suggests that there was something else brewing that may one day make Netflix and Microsoft more foe than friends.
Nothing meaty has materialized on that front, but now we have Variety reporting that Microsoft's Xbox will begin offering original programming by early next year.
Nancy Tellem -- Microsoft's president of entertainment and digital -- is hoping to have something out during next quarter. At the latest, the push for original content will have to wait until the following quarter. She made these comments during a Variety industry presentation.
If there are any doubts that this could be the reason for Hastings bowing out of Microsoft, keep in mind that Tellem -- a seasoned TV executive -- was hired by Microsoft to do exactly this just two weeks before Hastings made his announcement.
Microsoft's decision to set its Xbox platform apart by cranking out original programming isn't something that's going to make Netflix lose any sleep. As rich as Microsoft may be, it's not going to be making the kind of capital investment necessary to bring a House of Cards or Arrested Development revival to its fold.
However, it's also easy to see why Hastings left when he did. Even if Microsoft will never pose much of a threat to Netflix as a video service -- and there are no assurances that Mr. Softy will be a non-factor forever -- it would have been awkward for Hastings to sit around as the board discussed its digital future.
As tech companies expand their business models, expect more board resignations to continue when a new turn hits too close to home.
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The article Is This Why Reed Hastings Left Microsoft? originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Netflix. The Motley Fool owns shares of Microsoft and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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