Yahoo is coming for online video — and the ads that accompany it. Days after announcing its $1.1 billion acquisition of blogging platform Tumblr, the 18-year-old Internet company has submitted a bid for the premium video streaming service Hulu, currently co-owned by NBC Universal, Fox, and ABC-Disney. According to AllThingsD, Yahoo faces competition from both Time Warner Cable and DirecTV, along with a handful of private equity firms. Given the current ownership split, it's unclear how much stake in the service Yahoo is seeking, but it certainly remains possible that Yahoo will attempt to capture a majority stake in the company. Hulu is reportedly valued at over $2 billion, and Yahoo CEO Marissa Mayer has shown she is very willing to spend that kind of money.
This bid follows months of speculation about Yahoo's underwhelming video offerings and its lagging advertising revenue. Amidst these rumors Mayer met with Hulu's executive board in May, less than a week after Yahoo failed to secure a majority stake in the popular French streaming site DailyMotion, after the deal was blocked by French regulators. A Hulu deal makes a lot of sense: the site would make up for Yahoo's video shortcomings in a big way, given Hulu's successful advertising platform, deep library of premium content, and its built-in audience of 4 million-plus users (and that's just the ones who pay). At the same time, it would add to Yahoo's momentum, driven largely by Mayer, who oversaw the Tumblr acquisition, a major Flickr redesign, and a string of well-received smartphone apps that tap into an array of Yahoo services. And, of course, Hulu lacks the terabytes of porn for which Tumblr is famous.