Yahoo! Inc. (YHOO), Time Warner Cable Inc (TWC), DIRECTV (DTV): Finding the Right Fit for Hulu

Page 1 of 2

The bidding war for Hulu is starting to take shape, with Reuters reporting that the video site’s price tag has topped $1 billion. That seems like a princely sum for the site, but for a select list of bidders, it might be well worth the expense.

Hulu vs. Netflix

Hulu was the media industry’s response to Netflix, Inc. (NASDAQ:NFLX). Netflix’s streaming video service was catching on quickly with customers and the traditional television content companies felt they needed to get involved. It was the right decision.

However, Hulu’s focus was about getting new content online without interfering with the television distribution model. So new content is delayed until after its traditional broadcast and even paying Hulu customers are forced to watch advertisements. Tübingen, unhindered by the television model, has focused on letting customers watch what they want, when they want, and how they want.

This makes some potential Hulu buyers more appropriate than others.

Itching to get video

Yahoo icon

Yahoo! Inc. (NASDAQ:YHOO) is one of the rumored bidders. The company has plenty of cash to make a billion dollar bid after selling half of its take in Alibaba for around $7 billion. While it has been using that cash to make small acquisitions, it also just inked a billion dollar deal to buy Tumblr.

Tumblr, a photo and media focused blog site, is a much better fit than Hulu would be. Not only does Yahoo! Inc. (NASDAQ:YHOOalready have experience in the photo space, but the service doesn’t come with legacy baggage. While new CEO Marissa Mayer has been deftly using acquisitions to further her turnaround effort, Hulu would pull the company off on a tangent. And the content providers who currently own Hulu would likely balk if she tried to turn the service into a more modern product by killing ads, increasing content, or trying to make content more timely.

Yahoo! Inc. (NASDAQ:YHOO) is increasingly looking like it has long-term appeal again, which is why the shares have been heading higher. It’s a good option for aggressive investors looking for a turnaround play. That said, the company’s top line has yet to turn higher, though it has appeared to stabilize to some degree. Caution is still warranted.

The addition of Tumblr, which notably increases the company’s ad network, should be a big help. While investors might cheer a Hulu purchase, it has too much baggage for an easy integration.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!