Bids for the online video service Hulu are expected Wednesday, and The Wall Street Journal reports that Amazon.com, Google, Yahoo and DirecTV are considering offers.
Amazon could be an interesting suitor, especially given the company’s plans to expand into tablet computers. (Imagine the gadgets pre-loaded with a Hulu channel). Amazon also has been expanding deeper into online video, inking a deal last month with CBS to stream classic TV shows such as Cheers and Star Trek.
But a Hulu buyout may come with too high of a price tag. The Journal reports that bids could range between $500 million and $2 billion. If bidding goes to the upper end of the range, that would be the largest acquisition in Amazon’s history. (Topping the more than $800 million paid for online shoe retailer Zappos).
Here’s why there’s such a big potential gulf in the bidding prices, according to the Journal:
The often diverging interests of the media owners and Hulu management is a reason the controlling owners decided to explore a sale around June, people familiar with the matter have said. Now the owners expect they will have to decide what sort of rights they are willing to give what sort of buyer, and to address that different buyers may value rights differently, according to one of the people familiar with the matter.
If the digital rights get sorted out, Hulu could make a pretty interesting target. And here’s why:
Hulu CEO Jason Kilar previously worked at Amazon.com, writing the original business plan for the online retailer’s expansion into DVDs and movies. In that role, he reported directly to Amazon.com CEO Jeff Bezos.
Could he soon be reporting to his former boss again?
Certainly, a lot of things would need to be sorted out, and the purchase price would have to make sense. But Amazon may make for one of the more interesting suitors.
And with Google — owner of YouTube — now trying to digest Motorola for $12.5 billion it could be an interesting time for Amazon to put a stake in the sand as it relates to online video.
However, as noted above, Hulu may just be too rich for Amazon’s blood. After all, the company’s cash position stood at just $2.6 billion at the end of the second quarter.
