Two rumors about mergers and acquisitions made the rounds of business front pages yesterday. Apple Inc. (NASDAQ: AAPL) might use the billions of dollars it will move from offshore to the United States to buy Netflix Inc. (NASDAQ: NFLX). Amazon.com Inc. (NASDAQ: AMZN) might buy Target Corp. (NYSE: TGT) to challenge arch-rival Wal-Mart Stores Inc. (NYSE: WMT). These deals might make sense, except that joint ventures could achieve most of the benefits of acquisitions, the costs of which would rise into the hundreds of billions of dollars.

For Apple to swallow Netflix, as a means to challenge streaming media companies, particularly Amazon, it would have to pay $100 billion, if the deal could be done at a modest premium. Target would go for $45 billion or more. With the sales and earnings of the two target companies, a rational return is unlikely. They would need to be considered “strategic deals” to substantially enhance the fortunes of the buyers. Strategic deals have a habit of failing.

Amazon could help both Target and itself if it were to become the online e-commerce engine for the traditional retailer. Target could become a massive store with presence at Amazon. This would bring it “foot traffic” that Target.com does not get. Amazon would need to accept the fact that Target would sell items that Amazon already sells on its own. The math for Amazon is whether it can make more money with Target as such a close ally. Such a move would certainly threaten Walmart. The risk to Amazon’s revenue if Target.com merchandise sat side-by-side with its own merchandise would certainly cost it less than $45 billion. If Amazon wants to challenge Walmart, it does not need to buy Target’s troubled store network. Target needs help, desperately, online.

Similar circumstances apply to Apple and Netflix. Apple is well behind both Netflix and Amazon in the streaming business. Netflix and Amazon may have enough of the U.S. market that Apple’s prospects are dim, even if it uses its cash war chest to create its own content and cut attractive deals with studios. Its network of consumer electronics from iPhones to Macs does not mean that the owners of these will favor an Apple service over one from its larger streaming rivals. Netflix, on the other hand, has a great deal to fear from Amazon. Netflix could use Apple’s cash hoard to build out its original programming, the costs of which threaten its earnings and erode its balance sheet. Apple would need to give up on the prospects of its own streaming service for one that might be co-branded with Netflix, or at least set up for Apple to get a return on each new Netflix subscriber.

When it comes to sharply increasing their business prospects, and revenue, Apple and Amazon could rent rather than buy.

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