The last we heard of Hulu were talks about the company issuing an IPO worth $2billion but it seems that idea has been scrapped in favour of a buyout by one of the internet’s biggest players.
The rumour goes like this:
After Yahoo! Inc and Microsoft Corp, Hulu is in ‘serious’ discussions with Google who is very keen on acquiring the worlds 10th most popular video streaming site.
Reports say that the Hulu was approached by a potential buyer on 21st June. Following this the company engaged some prominent bankers to help in this process. The latest reports indicate that Hulu seems to be interested in finalizing a deal with Google, Yahoo or Microsoft; though a final decision is still to be taken.
While the sale could bring in as much as $2 billion for Hulu’s owners (including Walt Disney Co, News Corp and NBC Universal), many people are asking why is Google considering buying ‘another’ video streaming company when it already has YouTube? The answer lies in advertising. Hulu is set to generate revenue of $500 million in 2011 with a 50% increase in number of advertisers in the first quarter of 2011 itself. While Google already owns the site with most online video views (YouTube) it is no doubt eager to acquire the site with the most ad views (Hulu), thereby eliminating any competition in the video market.
Hulu is popular not only with web surfers, who can access to popular TV shows for free, but also with advertisers. Owing to its popularity, Hulu launched a paid subscription service for TV channels to stream their popular TV shows. This leads to more audiences, more advertisers signing up, more ad displays and ultimately more revenue for Hulu.
So, will it be Google, Yahoo! or Microsoft who spalshes enough cash Hulu’s way? I guess only time will tell.