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Google among a dozen firms looking to buy Hulu

Tue, 07/05/2011 - 8:15am
Ryan Nakashima, AP Business Writer

LOS ANGELES (AP) – Search giant Google is one of about a dozen companies involved in talks to potentially buy online video site Hulu, a person familiar with the matter said Friday. As the owner of YouTube, it would be a strategic buy for the Silicon Valley technology company, which has had a rocky relationship with Hulu's Hollywood owners.

Hulu has begun presenting its financial information to many prospective bidders, but it's too early to declare a front-runner, said the person, who spoke on condition of anonymity because the discussions are confidential.

The online video service began seeking bidders early last week after an unsolicited offer prompted Hulu's board to look for other interested parties.

Hulu streams movies and TV shows from broadcasters ABC, Fox and NBC to personal computers and, for a monthly fee, to a range of Web-connected devices. The company is owned by the broadcasters' parents – The Walt Disney Co., News Corp. and Comcast – along with Providence Equity Partners.

In February, Hulu CEO Jason Kilar said Hulu will have 1 million paying customers by the end of the year and generate nearly $500 million in revenue, up from $263 million in 2010. He has said the company is profitable.

Google's own attempt last year at launching a service that streamed Web content onto television sets, Google TV, was met with a blockade by broadcasters that continues to this day. People using personal computers can see recent shows on Hulu for free with ads, but those trying to access them through Google TV aren't able to. Hulu does not allow viewers to watch its shows on mobile devices or through television sets unless users subscribe to Hulu Plus, an $8-a-month plan that offers access to a broader catalog of material.

Even if Google were to buy Hulu, the right to continue to stream content from its current owners isn't guaranteed. The broadcasters insist Mountain View, Calif.-based Google must reach a new agreement to license the content to be used in that way.

Google's YouTube also rents movies from studios such as Sony, Warner Bros., Universal and Lionsgate, but not from Disney, Paramount and 20th Century Fox. Paramount owner Viacom is appealing a lower court's rejection of its $1 billion lawsuit in which it accuses YouTube of showing tens of thousands of pirated video clips from its shows.

Google's interest in Hulu was earlier reported by the Los Angeles Times.

A Google spokesman said the company doesn't comment on rumor and speculation. A Hulu spokeswoman declined to comment.

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