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Who will buy Hulu? At least one contender drops out

Speculation about who will purchase the online video service continues to run rampant, but sources tell The Hollywood Reporter that it's down to three bidders.

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Desiree DeNunzio
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Hulu
Who will snap up online video service Hulu? Speculation continues to run rampant. But at least one contender has reportedly bowed out.

AllThingsD reported Friday that sources close to the situation said private equity firm Silver Lake did not plan to make a follow-up bid to purchase the video service. Silver Lake was up against a slew of companies that had expressed interest in Hulu, including Yahoo, DirecTV, Time Warner Cable, Guggenheim Digital Media, and a joint bid by the Chernin Group and AT&T.

Furthermore, sources told The Hollywood Reporter on Friday that Hulu has narrowed it down even further to three suitors: DirecTV, The Chernin Group, and Guggenheim Digital Media. Yahoo is clearly not likely to remain in the running as a final bidder, with its initial bid for the service coming in low, a source told Variety.

Bidding for Hulu, which is owned by Walt Disney, News Corp., and Comcast, ended this afternoon. While that should narrow the playing field, the rumor mill, which has been churning for quite some time, isn't likely to slow down anytime soon.

Hulu has been looking for a buyer for the past couple of years. Its owners put it up for sale in 2011 but then called things off later that year, saying, "Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu."

But since that time, co-owner Providence Equity Partners sold its stake in the service, and Comcast's NBC Universal gave up its say in management matters. The remaining owners, Disney and News Corp., have failed to agree on Hulu's strategy.

It's no surprise that more than one big name is making a play for the video service. Hulu says it has 4 million subscribers paying $7.99 per month, and it posted $695 million in revenue in 2012.

Silver Lake declined to comment. CNET has contacted Hulu for comment and will update this post when we learn more.