Yahoo is attempting to strengthen its online services, and in addition to its recent $1.1 billion Tumblr purchase, it seems like Marissa Mayer is willing to write another big check for Hulu.
When Marissa Mayer said that Yahoo wanted to up its presence on the internet, she wasn’t joking. The company recently bought Tumblr, a $1.1 billion purchase that might or might not pay off for Google. With social networking out of the way, Yahoo wanted to tackle videos. Yahoo’s bid for a major stake in Dailymotion was shot down by regulators, but perhaps Mayer and Co.’s bid for Hulu might fall through.
Sources familiar with the Hulu bidding war has reported that Yahoo has thrown onto the table a bid in the range of $600 – $800 million. However, it is unlikely that Hulu’s owners will part way with the premium video service for anything less than $1 billion, which is a given considering the owners were asking for $2 billion just two years ago.
Conflicting business strategies between Hulu’s co-owners caused the partnership to go sour, and hence the decision to put up the for sale sign. Part of Hulu’s management wanted to emphasize a subscriber-based model, whereas the other party wanted an advertising-based strategy.
Should Yahoo end up walking away with Hulu, it’s likely that the VoD service will lean more toward an advertising model. Still, it should be noted that Hulu currently has a couple million subscribers, and a premium service will also be viable. Mayer’s root, an ex-Google executive, is signaling a more YouTube-like approach to Hulu if she manages to bargain with Hulu’s owners.