Om Malik surprised me today by suggesting Yahoo! should buy Hulu, the joint venture video portal of NBC Universal and News Corp. The company was founded in 2007 to create a destination site to present content from TV networks and was a response to the meteoric rise of YouTube.
Malik comes to that conclusion while thinking about the need for a solid number 2 exec at Yahoo! now that they’ve named Carol Bartz as their new CEO. He thinks Jason Kilar, Hulu’s young CEO, is a natural for that role and he suggests Yahoo! buys them.
He says: “With his service growing by leaps and bounds, and advertisers lining up to get on board, Kilar’s only problem is that he doesn’t have enough traffic –- like, say, YouTube. That will change over a period of time; and as we all know, time is an elastic concept. Perhaps this is where Yahoo can help. Or rather, where the two can help each other. Clearly search and search advertising isn’t quite working out for Yahoo; what Yahoo knows best is media and content. Which is why buying Hulu would be a strategically relevant acquisition for the company — it would play to Yahoo’s media strengths.”
He adds to explain why NBC and News Corp. would sell: “You’re probably thinking, why would Fox and GE sell their pet project to Yahoo? Well, why not? After all, they took a $100 million investment from Providence Equity Partners, which means they have an interest in making some sort of a return on this company.”
Wrong. Wrong. Wrong. Hulu is one of the core elements of NBCu and News Corp online video strategy. They were ridiculed when it was first announced (Techcrunch called it Clown Co., they’ve changed their minds since then) but they proved everybody wrong. Most people thought a joint venture between traditional media companies would fail, that the user experience would be bad, that no one would use it. According to this article, in September 2008, they streamed 142 million videos, a 42% month over month increase. It’s growing fast and on the verge of becoming a major player online. Selling Hulu to Yahoo! would be like AT&T selling YellowPages.com to Google. Won’t happen, nope. Don’t even think about it. As for return on investment, expect an IPO in a couple of years, not a sale.
And Hulu! We want access in Canada!
September 16, 2008
Very interesting slide from Frank Jules’s presentation yesterday. Jules is President and CEO, AT&T Advertising & Publishing. In it, he details the high-level strategic imperatives of the AT&T Yellow Pages organization.
December 11, 2007
AT&T held an analyst conference today and Ray Wilkins, Group President – Diversified Businesses, was presenting the “advertising and search” portion of the allocution. The presentation shows that YellowPages.com currently generates approximately $550M in revenues and that AT&T is aiming at more than $1B in revenues in 2010 for the site. They also expect a good revenue lift from advertising appearing in U-verse, their interactive television product.
Other interesting data points include:
- Print and Online Ebitda margins in the mid-40% range in the next three years
- Mobility advertising starting end of 2008
- 2 billion search queries in 2008 and 3 billion by 2010.
You can find the slides (.pdf) here.
(found on PaidContent.org)