Google Likes Hulu, but Really Lusts After Its Network Backers
Google (GOOG) may have a bid in to acquire Hulu, along with competitors Microsoft (MSFT) and Yahoo (YHOO). As some note, this could be a good buy just for the advertising value, as the site delivers a quarter of all online video ads.
But this is a bigger game for Google than adding revenue, although you can't knock that. The company sees video and entertainment as vital components for everything else it wants to do from the desktop to mobile devices, with Google TV thrown in. And buying Hulu would be the surest way for the company to get the relationships with major video studios that it wants and seems to be unable to get on its own.
The networks have given Google the cold shoulder since at least last fall, freezing out Google TV from access to their Web programming. And CBS (the corporate master of BNET) will likely continue to do so, as it favors Netflix (NFLX) over Hulu.
Buy one company, get network relationships free!
But there are plenty of networks already connected to Hulu. The company is a joint venture by NBC Universal, News Corp (which owns Fox), and Disney-ABC Television Group. And there's simply no way Hulu could sell without strong contractual commitments that programming remains available to the buyer for a significant amount of time. After all, those studio relationships are Hulu's biggest asset.
If Google can pull off an agreement (and it would have to sweeten the pot with a lot of cash, given how little love the studios bear the company), it would certainly offer new ways of making money from advertising. But a deal would also give Google a way to stream current programming to Google TV buyers for the price of watching some ads.
With enough of a price tag, Google might even get to offer more programming over Android phones and tablets. Either of those could be a way to even the playing field with Apple (AAPL).
Of course, this could stir up already existing antitrust concerns, especially as Comcast closed NBC's original Web content group. Good thing that Google hired 12 lobbying firms to deal with its Federal Trade Commission troubles. (They were probably cheaper by the dozen.)
Related:
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- CBS May Head to Hulu, Making the Video Site Even More Formidable
- Networks Versus Google TV -- Just Another Name for Net Neutrality
- Networks Shun Google TV, Apparently Believing It's Still 1960