Google, Yahoo, and Microsoft In Preliminary Talks To Buy Hulu

HuluAfter receiving an overture from Yahoo, Hulu has begun meeting with potential buyers including Google, Microsoft, and Yahoo in an effort to attract potential suitors. These meetings are confidential but were set up by Hulu’s financial advisors, Morgan Stanley and Guggenheim Partners.

Hulu has had a dramatic rise in popularity since its launch in 2007 as the online destination for streaming tv shows from all the major US networks for free. Since then they have introduced a premium package, Hulu Plus, which has enabled streaming for mobile devices such as the iPhone and iPad. The ease of use and availability of popular shows has meant that Hulu alongside Netflix has converted many of the previous internet pirates into customers and the high quality shows on offer alongside a large userbase has attracted many big name advertisers.

Google has recently been attempting to attract more high quality content to Youtube and has hired industry veterans to help with the task – but Hulu could be an attractive proposition as it already has the shows and deals in place.

Yahoo could do with the introduction of a high profile and successful media brand to its current portfolio, and Hulu could bring users and advertisers back to the Yahoo portal. Yahoo has long had a relatively successful video portal in Yahoo Video, but its 26 million users last years pales in significance behind Youtube’s 111 million according to Nielson. The Hulu content could make Yahoo the place for high quality television, taking the high profile advertisers and leaving Google/Youtube with amateur videos.

Microsoft already offers Hulu Plus alongside Netflix and ESPN subscriptions to users of its Xbox games consoles. Bringing Hulu in-house could provide them with greater control of these offerings and build Xbox Live into a full entertainment services.

The worry for each of these technology companies is the role that entertainment companies have traditionally taken with new disruptive businesses such as Spotify or Netflix – they are happy to see the service grow, but once they are established they try want to take greater equity and control or will try and make the business fail by adding huge restrictions to licenses or stop offering them at all. It is a risky business to be in, with Hulu doing so well over the last few years likely due in part to the fact that it was from the start a joint venture between NBCUniversal (Comcast/General Electric), Fox Entertainment Group (News Corp) and Disney-ABC Television Group (The Walt Disney Company).

[via LA Times]

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