FORTUNE — The rise of Netflix took years, but the fall is taking much less time. After enjoying a steady increase in its stock price from $5 a share in late 2002 to $305 a share this summer, the stock has plunged back to $73 a share in a little over four months.

So precipitous has Netflix’s (NFLX) decline been that it’s inspired something that was hard to imagine a few months ago: talk of a takeover by a media giant. Netflix rallied 6% Monday on rumors that Verizon (VZ) was interested in buying the streaming-video pioneer, now trading at a $3.8 billion market cap. A second report citing a media analyst’s confirmation of Verizon’s interest added to the gains Tuesday morning.

Despite all the chatter, Netflix finished Tuesday down 4%. After all, rumor-driven rallies rarely have much staying power. But once a company is tagged as M&A bait, it can become a self-fulfilling prophecy. Other potential buyers start wondering if they should get in on the bidding. Investment banks see an opportunity to earn rich fees on a big-ticket deal.

As skeptics of the Verizon-Netflix rumors pointed out, buying Netflix will incur costs beyond its current market value — it also means taking on billions of dollars in commitments to license movies and TV shows. And Netflix has a stubborn independent streak that would make it prefer to struggle through its tough times on its own.

But in the end, Netflix may not have much choice if a generous offer comes its way. Shareholders are already unhappy that the stock is trading at a 21-month low. The company has $366 million in cash and said last month it would sell $400 million in stock and debt to finance future operations. A cash-rich media parent could ease that burden while offering a stronger voice at the bargaining table with content owners.

So while Netflix may well remain independent in the next year or so, it’s worth considering which potential buyers would be the best fit. Here are some of the most frequently mentioned suitors.

Verizon. On the one hand, Verizon appears to be showing stronger interest in Redbox, which is planning to launch a streaming-video service in May 2012. On the other hand, Redbox is likely to face the same onerous licensing costs that plague Netflix, and Verizon might be better off buying a company experienced in licensing streaming rights. And besides, by hinting of a Redbox deal, Verizon can push down Netflix’ price – making a deal that much cheaper.

But if a Verizon deal makes sense on the face of it, it could become problematic over time. The two companies’ cultures are incompatible. Netflix takes risks that often (but not always) pay off, and builds its products around the customer’s experience. Verizon is risk-averse and builds its strategies on wringing fees from customers. If Netflix members staged a revolt over of the subscription fiasco, imagine how they’d react if Verizon raised fees further or demanded Netflix users sign up with its Internet service.

Microsoft. Netflix could give Microsoft (MSFT) the popular online service it’s never been able to build on its own. The Xbox has gone from gaming console to a well-received smart TV device, and integrating Netflix’ streaming-video service could put it ahead of Apple (AAPL) and Google (GOOG). Plus, Reed Hastings could bring Microsoft a seasoned executive who instinctively understands where digital content is going.

Google. If the search giant can buy a phone maker, why not a video service? At $42.6 billion Google’s cash stockpile is 116 times the size of Netflix’s. Google already owns the only other digital-video property that has been embraced by the masses: YouTube. Combining the best features of both could lead to the only site you’d need to visit to get your video fix. Google’s recent comments on a controversial anti-piracy bill, however, could strain relations with studios that Netflix must license from.

Apple. As with Google, Apple’s $45 billion in cash will not only buy Netflix but sign many content deals and still leave tens of billions in the coffers. Thanks to iTunes, Apple has longstanding relationships with TV and movie studios, which could secure better terms for Netflix. And like iTunes, Netflix could spur enough sales of Apple devices that Apple doesn’t need to worry about making the profit that Netflix investors expect today.

Amazon. For as long as Netflix has been around, someone has been suggesting a merger with Amazon (AMZN). Consumers have been buying DVDs from Amazon for years, and with IMDB, the best single film database on the planet, finding and researching movies to watch would be a cinch. The catch has been that owning Netflix’s mailing facilities would open it up to taxes in many states. But that may change now that Netflix seems ready to sell off its shrinking DVD-rental business.