It seems that talks are advancing in the potential sale of Hulu, and the companies circling the prize are surely not small by any measure.
News came last week that surprised the tech world that Hulu was putting itself up for sale. Despite the fact that it is on track to pull in $500 million in revenue this year, the rise in popularity of the service has begun to annoy cable companies and satellite providers that the owners of Hulu still need for their day-to-day operations. Apparently the solution is to sell the service to a third-party, and when the service retained Morgan Stanley to lead the sale, it was confirmed that was where the company was heading.
Of course the question that immediately arose was who could potentially buy them. The first name floated around was Yahoo, but no one seemed willing to confirm that information. Now news comes via the Los Angeles Times that not only is Big Purple in the running, but so are Microsoft and Google.
According to the unnamed sources, Google is in at least preliminary talks with Hulu, but the status of the other two contenders is unclear. Speculation is that the company could sell for around $2 billion based mainly on the strength of the licenses it currently has which would all go with the sale of the company. The issue would be when those licenses would come up for renewal as none of the perspective buyers have the best relationships with the studios, especially Google due to its seeming laissez-faire attitude towards copyrights in regards to YouTube.
This is bound to get ugly down the road after the purchase is made as the new owner tries to retain the licenses. The studios will be looking for major dollar amounts from these companies, and it will become a question of return on investment for them. Whatever price they pay now will be remembered with fond memories as when they got all of this on the cheap.
Certainly this story will play out over the next few months, and it is going to be very interesting to see who comes out on top.
What do you think about Google selling itself off? Who do you think would be the best new owner?