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(Updates share prices in fifth paragraph.)
June 23 (Bloomberg) -- Facebook Inc., the world’s largest social-networking website, appointed Netflix Inc. Chief Executive Officer Reed Hastings to its board, adding expertise in the distribution of digital entertainment.
Hastings becomes the sixth director at Facebook, the company said in a statement today. Existing directors include venture capitalists Marc Andreessen and Jim Breyer and Washington Post Co. chairman Donald Graham.
Fast-growing Facebook is deepening its board while preparing to disclose financial data or hold an initial public offering by April. Hastings co-founded Netflix in 1997 before taking it public in 2002. Netflix rallied amid speculation that his presence at Facebook may foster cooperation between the movie-rental business and the social network, which has more than 500 million users, said Atul Bagga with ThinkEquity LLC.
“One leg of growth for Netflix will be tighter integration with Facebook,” said Bagga, a San Francisco-based analyst who recommends buying Netflix and doesn’t own the shares. A tighter partnership between the sites could improve Netflix’s movie recommendations and help bring it more users, he said.
Netflix shares rose $7.06, or 2.8 percent, to $255.72 at 4 p.m. New York time on the Nasdaq Stock Market. The stock has climbed 46 percent this year.
Facebook is adding a veteran of digital entertainment to its board as it prepares to compete more aggressively in video offerings. This year, Time Warner Inc.’s Warner Bros. studio announced plans to offer movie rentals on Facebook for $3, while Facebook and Netflix have discussed incorporating more social features into the online video-streaming service.
“Reed is an entrepreneur and technologist who has led Netflix to transform the way people watch movies and TV,” said Mark Zuckerberg, founder and CEO of Facebook, in the statement. “He has built a culture of continuous rapid innovation, something we share and work hard to build every day.”
Palo Alto, California-based Facebook is valued at $71.3 billion on SharesPost Inc, a secondary exchange for shares of private companies.
Steve Swasey, spokesman for Los Gatos, California-based Netflix, declined to make Hastings available for comment on the appointment.
--With assistance from Cliff Edwards in San Francisco. Editors: Lisa Rapaport, Jillian Ward
To contact the reporters on this story: Douglas MacMillan in San Francisco at Dmacmillan3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at email@example.com