Google in talks to buy Hulu: report

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

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."

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