Hulu Goes on the Block

Why might Yahoo buy television on demand service Because it would drive more audience to Yahoo. Why might Google buy Hulu? Because the rumored minimum bid of $500 million dollars is practically a rounding error for the Mountain View company.

There are other dogs in the hunt, namely AOL, Amazon and Direct TV.  But the solid money is on either Yahoo or Google.    TechCrunch, in its usual disregard for copy editing, calls it a "Hail Marry" for Yahoo. 

Yahoo users watch a lot of video: 41 minutes a month, says the Wall Street Journal, and adding Hulu's average of a staggering 208 minutes would help Yahoo draw eyeballs.

Google has never had a problem drawing audience, but leaders can find good reasons to like Hulu. It could fit into some sort of rebooted "Google TV" effort. It would make Google a major player in the entertainment industry. It would piss off Yahoo.

Much to everyone's surprise, Hulu became a great internet property by rethinking how digital media was treated online -- few commercial breaks, high definition, nearly immediate availability and ease of use. Few expected such forward thinking -- critics called the effort the "Clown Company" before seeing the finished product.

But that consumer-centric excellence displeased the very networks that own the content.    Executives, worried that their own product was cannibalizing regular television audience, began removing some shows and delaying others. This is why you have to wait eight days to see some programs on Hulu, and can't watch the awesome Fox show 'Archer' at all.

This would lead one to wonder how selling the company to outsiders would work any better. Why would  Google-Hulu execs have a better relationship with the networks than execs from a Hulu owned by the network itself?

Further, while Hulu's user-interface is delightful, the real value of Hulu is its television content. If you're Yahoo, you could offer money to buy Hulu -- or offer the same money directly to the network content creators for the actual content.

Hulu will start taking bids Wednesay, but is under no requirement to sell at any price.

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