Yahoo is rumored to be among one of the firms putting in an offer to buy Hulu, but can Yahoo convince Hulu’s co-owners that the video service is worth less than $2 billion?
Hulu’s current owners—Disney, News Corps, and Comcast—unsuccessfully tried to sell the video service for $2 billion about two years ago. No one bit on the asking price, and so Hulu continued on its current path, which is a mix of bickering about which direction Hulu should go in. A part of Hulu’s ownership wanted to turn Hulu into an advertisement platform, whereas the other part wanted to use a subscriber-based model.
Among some of the known bidders for Hulu are Time Warner Cable, Amazon, Guggenheim Digital Media, and former News Corp. President Peter Chernin. It is unclear at the moment how much Yahoo has put on the table, but it seems like interactivity through videos is on Marissa Mayer’s must-do list.
Yahoo and its management are willing to spend to turn the company around, as evident by its recent $1.1 billion Tumblr acquisition. According to Yahoo’s estimate, Tumblr will increase monthly visitors to Yahoo’s various platforms by about 50 percent—roughly, 300 million users. Recent reports are suggesting that Tumblr is one of the social networking platforms to look out for as a new generation of internet users, especially teens, move away from Facebook. While it’s strictly speculative, it certainly appears as though the Tumblr acquisition might pay off big for Yahoo down the road.
Mayer, a former Google executive, is trying to steer the battered Yahoo ship away from shallow water, but it seems like Mayer is trying to equip a warp drive on a ship that might not hold under extreme pressure. Some analysts think that Yahoo should slow its burn rate, and explore smaller and cheaper acquisitions.