Google in preliminary talks to buy Hulu
By Robert Briel

Google is in preliminary talks to buy online video portal Hulu, people familiar with the situation said, according to a report in the Los Angeles Times.

The news follows earlier reports that both Yahoo and Microsoft are interested in the video service, which offers US viewers access to the free Hulu and premium Hulu Plus services. Hulu, backed by Comcast (NBC Universal), Disney, and News Corp (Fox), offers full length TV series and other content.

In the past months, Google has been trying to beef up its YouTube portal with premium content and deals with broadcasters. It has also tried to establish Google TV as the ultimate connected TV service, but so far met with resistance from broadcasters and other content owners.

Swooping up Hulu would solve the premium content issue for Google, but Hulu has its own problems with networks affiliates and cable operators, who are not pleased that the portal offers programming that was just aired on regular broadcast TV stations and cable channels.

That could be the reason why the three studios are now exploring ways to sell Hulu and in the process they have hired Morgan Stanley and Guggenheim Partners. But the main value in Hulu is access to premium content Ė so these need to be kept in place in order to sell the operation at the highest price possible.