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NEW YORK ( TheStreet) -- Is Netflix ( NFLX) a takeover target?

Jim Cramer told Debra Borchardt at TheStreet.com Wednesday that he thinks Microsoft ( MSFT) should snap up the streaming media giant.

Cramer said that Microsoft may have lost its edge in the tech world but it certainly hasn't lost its cash or balance sheet, which would make buying Netflix an excellent move for the company.

He said that unlike Microsoft, Netflix has brand recognition and buzz among younger demographics and the service, combined with Microsoft's Xbox, would allow Microsoft to "own" the living room.

Beyond that, Cramer said Microsoft is also a larger company and would allow Netflix to negotiate better content deals than the company can on its own. Cramer praised Netflix CEO Reed Hastings, but said that with Microsoft's backing this talented entrepreneur could take Netflix to a whole new level.

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-- Written by Scott Rutt in Washington.

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At the time of publication, Cramer's Action Alerts PLUS had no positions in the stocks mentioned.

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