Yahoo is reportedly looking to buy video-streaming service Hulu. And it isn't alone.
Hulu, which is owned by Disney, News Corporation, and Comcast, has been holding a secret auction to sell itself.
Yahoo put in a bid (in the $600 million to $800 million range, according to AllThingsD) for the service while private equity giants Silver Lake Partners and KKR have made separate bids, according to Bloomberg. This is a far cry from the rumored $4 billion Google was willing to spend on Hulu back in 2011.
Yahoo's appearance in the Hulu auction isn't altogether surprising, as unlike rival web firms, it doesn't have a popular video streaming service, meaning it can't offer advertisers the chance to display advertising on video that typically commands higher rates.
In April, 1.5 billion video ads were viewed on Hulu in the U.S. And Hulu delivered the highest frequency of video ads to its viewers (an average of 63) in the U.S., according to comScore.
Yahoo, which announced last week that it had bought Tumblr for $1.1 billion, previously tried to buy French video streaming website Dailymotion, however that deal has stalled.
But Yahoo won't be alone in trying to buy what is arguably the third most important video streaming service after YouTube and Netflix. Guggenheim Digital, DirecTV, and Time Warner Cable are also in the hunt.
Although details of the deals reportedly posted by Silver Lake Partners and KKR aren't available, it's widely reported that one suitor, Chernin Group, has put forward a deal that values the firm at $830 million. Given that the firm claims to have advertising revenue close to $700 million last year, that figure seems a reasonable starting point.
However given that Hulu has attracted a gaggle of big name bidders in its auction, it is likely that the price will increase as the bidders try to get hold of the only major video streaming website on the market. With Google unlikely to let go of Youtube any time soon and Netflix doing very well for itself, Hulu is perhaps the only chance to get a significant piece of the lucrative video streaming market.
This article was originally published on Search Engine Watch.
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March 19, 2014