Google in talks to buy Hulu: report

Google in talks to buy Hulu: report

Summary: Google is among the top tech suitors for online video site Hulu, according to a new report. The others: Microsoft and Yahoo.

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Google is in early talks to buy online video site Hulu, the L.A. Times reports.

Hulu has reportedly been meeting with potential buyers; Microsoft and Yahoo were also among those named in the report.

It's the latest step in what I called on Monday a "pass the potato" scenario, with owners Walt Disney, News Corp. and Comcast looking to unload the site somewhere where the spectre of direct competition won't rear its head.

Hulu is receiving financial advisement from Morgan Stanley and Guggenheim Partners.

Let's take a look at how Hulu fits into each company:

Google: the interest here is in advertising, as it relates to the many eyeballs Hulu attracts. Popular content draws big names; McDonald's, Johnson & Johnson and Toyota all advertise on the site. With $500 million in revenue this year from advertising alone, it's another place Google can leverage its network.

Yahoo: the interest here is in premium content. The company has been on an editorial hiring tear to bring its blog network up to the level of major publishers; video content helps Yahoo remain attractive as a major media company, rather than a basic search portal.

Microsoft: the keyword here is Xbox. The company has been using its popular gaming console as a more of media streaming hub for the living room; as such it's seasoned in dealings with Netflix and ESPN for rights for its customers.

Hulu of course offers popular television shows such as "Glee" and "The Daily Show with Jon Stewart." It's estimated that the site has 28 million monthly viewers.

So what's with the sudden pre-July 4 news? My CNET colleague Greg Sandoval thinks it's to jack up the sales price and stir rivalry between the potential suitors, all of whom are oft at each other's necks. (His post, which digs into the logic behind this argument, is worth a read.)

Will it work? And who ends up a loser? Hulu may be a pioneer, but I can't help but think of that classic financial disclaimer: "Past performance is not an indication of future results."

Topics: Google, Hardware, Mobility, Networking, Social Enterprise

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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21 comments
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  • RE: Google in talks to buy Hulu: report

    Well if Google buys it, kiss it goodbye. The site will be so riddled with ads, it'll make YouTube pale in comparison. Google will run the site into the ground just like everything else its name graces.

    If they buy it, I won't be using it.
    The one and only, Cylon Centurion
    • Normally niether EU nor even USA's government should ...

      @Cylon Centurion: ... not allow such purchase because Google already has too much presence in the video sector since it bought YouTube.
      DDERSSS
    • If you can't beat them -

      @Cylon Centurion

      Buy them!
      Will Pharaoh
  • RE: Google in talks to buy Hulu: report

    My bets on Microsoft. They would be able to utilize this with the xbox and phone services. It just seems this suits them better than google right now.
    Anti Fanboy
    • RE: Google in talks to buy Hulu: report

      @Anti Fanboy
      Don't forget Windows Media Center
      illegaloperation
  • RE: Google in talks to buy Hulu: report

    MS will get it... Ballmer hates Google.
    Hasam1991
  • RE: Google in talks to buy Hulu: report

    This will probably cause problems with Microsoft, since Comcast is owner of Hulu,and Comcast owns NBC which has parthnership with MSNBC. If Comcast sells their 33% participation from Hulu, there is now way Microsoft will be able to have royalities from a stream video service. But maybe, just maybe Comcast, News Corp and Disney are planning to get rid of a product which keeps all these companies tight together, so maybe at the end they don't want Hulu to provide their content, so Google will need to go with Time Warner, CBS, Viacom or Sony Pictures to look if they are willing to display their content.
    Gabriel Hernandez
    • This won't cause any problem for MS

      @Gabriel Hernandez
      since they make no money from Hulu's streaming as MSNBC IS the content provider.

      NBC shows? MS has a partnership with NBC for their cable channel MSNBC, but no investment in NBC itself (they make nothing from their primetime lineup) so streaming NBC shows never earned MS a dime.

      Hulu could be owned by anybody, but if they want that MSNBC stream to continue, then they still have to give MS and NBC royalties.

      So this doesn't effect MS really at all.
      Will Pharaoh
      • RE: Google in talks to buy Hulu: report

        @Will Pharaoh
        You are both wrong - Microsoft sold its stake in MSNBC back to NBC - the only rights they have and wanted to keep is the 50% stake in MSNBC.com.

        http://www.cbc.ca/news/business/story/2005/12/23/msnbc-051223.html
        jessiethe3rd
  • How fitting....

    The ads are the very reason I no longer use Hulu. Sorry but when watching a movie/show, I don't want to be disturbed by ads or a commercial popping up every 20 minutes. Especially when I paid for it. Netflix all the way baby......
    dave95.
    • RE: Google in talks to buy Hulu: report

      @dave95.
      AGREE! what's nice about Nexflix streaming is you can have up to 6 devices anywhere! so I added each one of my dads devices to my account, now they get streaming at their house!
      Hasam1991
    • RE: Google in talks to buy Hulu: report

      @dave95.
      So, in order to avoid commercials, you're going to wait out the many months it takes for most TV programs to finally reach Netflix? The part that you're leaving out is that TV programs typically become available on Hulu not long after their initial TV broadcast.
      Woochifer
      • RE: Google in talks to buy Hulu: report

        @SFWooch@...

        <em>"So, in order to avoid commercials, you're going to wait out the many months it takes for most TV programs to finally reach Netflix?"</em>

        Commercials are <u><strong>exactly why</strong></u> I dropped cable almost three years ago. Paying money, in fact paying about $100.00 month, to then be barraged with endless advertisements (that are much louder) is nuts!

        You all can pay to watch advertisements, watch those ads like bumps on logs, get dumbed down....or empower yourself to watch what you want even if it is not as current.

        I for one make the choice to watch fewer ads. And the day that Netflix forces me to watch ads on their streaming content I will cancel; I bet many will in fact should that day arrive.
        Raid6
      • RE: Google in talks to buy Hulu: report

        @SFWooch@... <br><br>What I realized when we moved into our new home was I really didn't care for these TV shows enough to pay what I was paying ($100+), and to seat through countless blearing commercials every few minutes. We had planed to turn the cable on in a few days like we've done so many times before whenever we move. But as we decided on which provider to use this time (Dish, Comcast, Direct), we gave Netfix a try on the kids Wii system. Turns out to be the best decision ever. It was such a refreshing experience for the whole family to watch their favorite shows and movies without the annoying ads that the decision was made to just forget cable all together. We've been trained to think we need to watch the shows immediately after it's aired, but I'm now ok with watching it on my time. A month, a year later it doesn't matter. <br><br>I once thought we could never live without cable but those days are gone. Sports (football) may hurt a little though...
        dave95.
    • RE: Google in talks to buy Hulu: report

      @dave95.

      My family loves Netflix and we don't have a cable feed and never have...
      DonRupertBitByte
  • RE: Google in talks to buy Hulu: report

    I really hope this is just a rumor. Google would end up with way too much control over internet video content streaming and, like Cylon Centurion said above, they'll slap so many ads on it that it will be annoying, at best, or downright painful, at worst, to watch anything on the service.
    Captiosus
    • They would convert Hulu to VP8 straight off the bat

      @Captiosus
      hoping to derail any competing codecs, and remove any support for h.264 since they can't control that standard.
      Will Pharaoh
  • Oh oh....

    So Google failed at creating their own video site [let alone two social networks and possibly a third on the way with Google+]. Now they are trying to go the "easy" way.... Just buy another site. If Goggle is desparate to buy it, Hulu's owners should jack up their price. Don't bother with any Google stock as the stock price will probably tumble later on [after Google's Hulu will close down].
    Gis Bun
    • RE: Google in talks to buy Hulu: report

      @Gis Bun

      You make some good points. But the larger lesson is that businesses, all businesses in fact, make many bad decisions.

      What is the average rate of failure for new restaurants, for example? I think around 90% or so fail within the first two years. Even if not that high it is still quite startling and yet people spend time and money trying...banks and private venture investors continue to invest...

      I guess I am less critical of the attempts for Google (and Apple, MS, Motorola, Nokia....and so on...) trying to do something even if it is stupid and half @$$ed.

      I am more critical of the impact (and the motives behind the business decisions that deliver said impact) than anything else.

      I for one am a user of MS products, love Win 7, Server technologies, etc...,and while I do prefer to see Redmond win this one, it really does not hurt the consumer in my view so long as they don't limit competition, limit access, and jack up the cost.

      If they throw copious amounts of advertisements then users will (hopefully) cancel.
      Raid6
  • Errrr.....

    If Google buys Hulu, Hulu will be shut down within 2 years as Google will abandon anything Hulu did. :-)
    Gis Bun