Report: Google is Hulu's latest suitor

Google, of all companies, reportedly is expressing interest in acquiring Hulu. It wasn't all that long ago that YouTube employees referred to Hulu as the "clown company." But Hulu has what YouTube does not: plenty of ad-supported TV shows and movies.

Google, owner of video-sharing service YouTube, is among the companies that have expressed interest in acquiring Hulu, according to a published report.

Actor Alec Baldwin once starred in a well-received Hulu commercial. Hulu

The Los Angeles Times is reporting that Hulu has begun "meeting with potential buyers, including Google, Microsoft Corp., and Yahoo, to drum up interest in a sale," citing anonymous sources. Responding to inquiries from CNET, a Google representative said the company does not comment on rumors or speculation.

The "preliminary talks" with suitors are a first step in deciding whether to sell, according to the LA Times report. Google's interest in Hulu would be ironic. YouTube employees openly mocked the service in 2007, when NBC Universal and News Corp. were developing Hulu. They called it the "clown company."

But YouTube stopped laughing when Hulu launched in October 2007 to positive reviews and quickly drew a large audience. Hulu possessed something that Google has yet to get its hands on: rights to offer full-length television shows and other content while supporting them with ad sales. Hulu, which also now boasts Disney as a financial backer, is a Web video portal with a large library of shows and a smattering of feature films.

YouTube, however, may have the last laugh. Hulu has struggled to find a winning business model, or at least one that satisfies financial backers. A rift between Hulu's management and the board spilled over into the public when CEO Jason Kilar published a blog post critical of some decisions made by the television industry as well as Hulu's main stakeholders.

Kilar said Hulu, which isn't believed to be profitable, is on track to generate $500 million in revenue this year-- a respectable but certainly not jaw-dropping figure. Netflix, the Web's top video rental service and Hulu's main competitor, saw $2.1 billion in revenue in 2010. Netflix also reported $160 million in net profit.

Reports of Hulu's possible sale said some of the company's content licenses would be honored in the case of a sale. That could sweeten the deal for would-be acquirers.

Correction, 6:22 p.m. PDT: This story incorrectly described the nature of the preliminary talks between Hulu and Google. They were a first step on the way to a possible sale.

 

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