Last week, the rumor mill echoed with buyout talks around online-video service Hulu. The current consortium of owners, which includes Comcast (Nasdaq: CMCSA), Walt Disney (NYSE: DIS), and News Corp. (Nasdaq: NWS), is looking for an exit strategy, and a simpler backing slate might even be good for Hulu's business.
I always thought Google (Nasdaq: GOOG) would be the most logical buyer, and fellow Fools Travis Hoium and Rick Munarriz both agree. "Hulu is the quick fix that Google needs," Rick says. "Hulu needs Google," Travis says. The difference between us is that I think there'll be a bidding war between Google and at least two or three other potential buyers -- Apple (Nasdaq: AAPL) and current co-owner News Corp. chief among them.
On Friday, a report in The Los Angeles Times showed that my vision is coming true. According to the paper's sources, Hulu's financial advisors have set up media and investor meetings en masse to gauge the depth of buyout interest. Headlining the interested buyers is Google -- score one for the Fools.
Other bidders lining up at the window include Microsoft (Nasdaq: MSFT) and Yahoo! (Nasdaq: YHOO). Adding weight to the report, Reuters and Bloomberg separately reported that about a dozen potential buyers are talking to Hulu. No word yet on whether News Corp. and Apple are among them, however.
Talks are expected to continue next week and culminate in a deal worth about $2 billion. Hulu's existing media licenses are probably worth that much alone, even without the online-video portal and related technologies. If those contracts are amenable to a change in ownership, this could get expensive.
Foolish founder and leader Tom Gardner sees the future of film moving online. Hulu is bound to play a large part in that revolution, with or without a consolidated ownership structure. These are the revolutions that create outrageous returns on your invested dollar -- will Hulu help create the next millionaire-maker?
