GMA News Online

Google, Yahoo, Microsoft eye buying Hulu

July 2, 2011 8:10pm

Tags: Google
At least three major tech firms are in preliminary talks to buy online video site Hulu, a US-based newspaper reported over the weekend.

The Los Angeles Times reported the three are among the potential buyers of the streaming-video subscription service.

Hulu's financial advisors, Morgan Stanley and Guggenheim Partners, set up the meetings with media, technology and communications companies, the report said.

Hulu's attractions

Microsoft, Yahoo and Google, which are also rivals in web search and web-based services, stand to gain from online video to reach a growing number of viewers who watch television shows, movies and short videos on Internet-connected devices.

The LA Times report said that Hulu's rights to the current season’s popular TV shows have drawn interest from Google and Yahoo, as they attracted more than 600 advertisers.

Hulu's attractions include popular TV shows like "Glee," "Modern Family" and Comedy Central's "The Daily Show with Jon Stewart."

According to the LA Times report, Hulu expects to bring in $500 million in revenue this year from advertising and proceeds from its Hulu Plus subscription service.

Company strategies

Google, which already owns video-sharing site YouTube, is seeking to add professionally produced content to its offerings.

Yahoo is seeking to bring more premium content to its popular portal.

Microsoft has offered access to movie subscription service Netflix Inc., sports cable channel ESPN and the Hulu Plus paid offering to users of its Xbox game consoles.

Two of the media firms behind Hulu, Walt Disney Co. and News Corp., recently renewed licensing agreements to make Hulu more attractive for a sale.

Comcast agreed to give up NBCUniversal’s management control in the venture to get approval for its acquisition of a majority stake in the media conglomerate.

Comcast is required to provide programming to Hulu on the same terms as the other owners.

But the report said that the new agreements may include provisions requiring users to prove they are paying cable or satellite TV subscribers before they can watch current episodes of shows one day after their initial airing, or they would be forced to wait.

The agreements would remain intact if Hulu is sold.

Graceful exit

The LA Times report said that a sale would allow Hulu's media owners to make a graceful exit from the service, whose success "created friction with traditional business partners".

Cable and satellite distributors complained about paying for the right to carry programs that Hulu offered free online. — TJD, GMA News
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