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Yahoo! Businesses Television

Yahoo Joins Growing List of Bidders For Hulu 69

Posted by samzenpus from the you-will-be-assimilated dept.
An anonymous reader writes "It's reported that Yahoo has formally put in a bid to buy Hulu only a week after adding Tumblr to the family. From the article: 'Yahoo just spent $1.1 billion of its cash hoard to acquire Tumblr, a blogging site with 300 million mostly young-ish visitors and 24 billion minutes of usage per month. Yahoo CEO Marissa Mayer's team can slap a lot of tasteful, personalized native ads into the Tumblr content streams to monetize the fast growing site. It's the same way that Facebook and Twitter hope to get into the tens of billions in revenue league, but it's a long and winding road. Now Yahoo is taking a run at Hulu, with its 4 million subscribers paying $7.99 per month, original programming , and more than 70,000 full TV episodes. Hulu could immediately put Yahoo's video efforts and revenue in a different league.'"
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Yahoo Joins Growing List of Bidders For Hulu More

Yahoo Joins Growing List of Bidders For Hulu

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  • With What Money? (Score:5, Insightful)

    by Anonymous Coward on Monday May 27, 2013 @04:11AM (#43831391)

    Yahoo spent 1.1billion of 1.2billion in cash reserves to buy Tumblr. Where is this $200 million coming from?
    Also, 300million seems low considering Hulu actually has decent revenue compared to Yahoo's other acquisitions which have lower revenue and were purchased for far more. E.g. Tumblr had $13 million in revenue last year, yet was purchased for 1.1billion; Hulu had $695 million in revenue the same year, 53 times that of Tumblr. Buying it for 1/4 the price would be a steal.
    Hopefully, Hulu will refuse to be bought by a company so irresponsible with its money, or for an amount less than half of its yearly revenue.

    • Re:With What Money? (Score:4, Insightful)

      by dingen ( 958134 ) on Monday May 27, 2013 @04:15AM (#43831395)

      Where is this $200 million coming from?

      A bank?

    • Re: (Score:1)

      by Anonymous Coward

      Where is this $200 million coming from? Also, 300million seems low considering Hulu actually has decent revenue compared to Yahoo's other acquisitions

      It seems you've misread the summary. According to the article:

      Yahoo is offering between $600 and $800 million

    • Revenue is far less important than profits in these purchases, Tumblr as you said had $13 million in revenue but actually made a loss of ~ $12 million, making it an even worse purchase. What are Hulu's profit margins?

    • Re:With What Money? (Score:5, Informative)

      by antifoidulus ( 807088 ) on Monday May 27, 2013 @06:29AM (#43831683) Homepage Journal
      By doing things like this [bloomberg.com]. Over the past couple of years Yahoo has reaped a lot of profit from it's overseas operations, esp. Yahoo! Japan(which is only 40% owned by Yahoo, but still), where they provide more than just search, they act as an ISP and provide other data services. The insanely strong yen has meant that over the past couple years the profit from Yahoo Japan when measured in USD has been incredibly high, and they obviously have some smart traders working for them as they foresaw the rapid weakening of the yen and made a huge profit off of it.

    • Dotcom era calling. Wants its bubble back. (Score:5, Interesting)

      by sjbe ( 173966 ) on Monday May 27, 2013 @07:27AM (#43831835)

      Yahoo spent 1.1billion of 1.2billion in cash reserves to buy Tumblr. Where is this $200 million coming from?

      Yahoo has about $3 billion in cash and equivalents [google.com] as of their last quarterly statement. Additionally, purchases don't have to be made in cash on hand. The company could be bought using cash, stock, options or some combination of the above. Additionally the company could issue debt to raise the capital to fund the acquisition. Also they could partner with someone on the buyout.

      For what it is worth, $300 million was last quarter's profit for Yahoo.

      Also, 300million seems low considering Hulu actually has decent revenue compared to Yahoo's other acquisitions which have lower revenue and were purchased for far more.

      Is it 1999 again? I thought the dotcom bubble burst. Here's why revenue doesn't matter. I can generate vast amounts of revenue selling $2 bills for $1. I'll have huge sales doing so. I'll also be bankrupt faster than you can say "Chapter Eleven". The only reason to use a revenue multiple for a buyout is because the company is not profitable and has limited prospects of becoming so.

      The amount of revenue they generate is irrelevant unless it leads to profits. I've seen reports that Hulu has turned a profit though it is unclear how much or what the future prospects might be. Revenue without profits can only be a short term situation. Sometimes doing so makes sense for strategic reasons (see Amazon) but there MUST be a path to profitability. Either Hulu must be strategically vital or it must have future profit opportunities Yahoo is aware of and I am not.

      Hopefully, Hulu will refuse to be bought by a company so irresponsible with its money, or for an amount less than half of its yearly revenue.

      It's quite possible that a price of 0.5X revenue is a fair price. It might also be too high or too low. Typical multiples of revenue for buyouts are between 0.6X and 1.2X annual revenue for a profitable company. Varies by industry. Depending on Hulu's future prospects, a 0.5X revenue multiple might be a fantastic price for its shareholders. However that also likely means it is a questionable deal for Yahoo financially.

    • Yahoo is offering between 600 and 800 million, not 300 million. It seems that Hulu is kind of playing a hide the numbers game after their last unsuccessful attempt to get bought, but back in 2011 they had a couple of quarters where they were profitable, but then they also made more like 700 million in revenue. It also wasn't mentioned just how profitable they were. I'm sure Yahoo has some visibility to those numbers that we don't, but as was the case with tumblr, this number looks far, far out of league wit
    • They spent like $5 billion last time they bought a leading video/audio website.

      Compared to that, Hulu's a bargain.

      But it's Yahoo, so they'll still find a way to make it fail.

    • Yahoo just has a great portfolio of products it does not push or market right. There new hub is great but besides that mail stinks anymore, search engine is so so the old good purchases I can think of to date are flickr and maybe tumblr. I think Hulu might be a good buy for them.
    • Where did you get the 1.2 billion in cash reserves? According to their filings, they have $3 billion, and they have a market cap of nearly $30 billion. And they're offering between $600 and 800 million... What are you talking about??
  • Is that what invades the stores on Black Friday?
  • "cash hoard", not "horde".

  • Is Yahoo a money laundering operation? How the fuck did they have $1Bn lying around to begin with?

    • Re:subject (Score:5, Insightful)

      by sqrt(2) ( 786011 ) on Monday May 27, 2013 @05:30AM (#43831547) Journal

      Their homepage is still heavily trafficked, and it's stuffed with ads and monetization schemes. For a lot of technically unsophisticated people who first got an internet connection back in the 90s, it's synonymous with the internet. It's the familiar first thing you see when you "go online." It's mostly vapid, uninteresting, pop culture, detritus to you and I--not to mention tastelessly cluttered--but it's compelling to a lot of people. Here's a hint what I'm getting at, you'll find celebrity gossip and sports scores prominently placed on their front page. The kinds of people who care about that stuff are the kinds who don't block ads, or even know it's possible; better still (for Yahoo) they are also the type who occasionally even click ads. They are real-world NPCs, Neal Stephenson's "slines" from Anathem, proles.

      I'm probably being too hard on them. Maybe some are brilliant in other areas of life and don't care one bit about technology, they're just sticking with what's familiar, and Yahoo actually was a decent company with some useful services. Back in the 90s they had a very useful directory style listing of most of the Internet that was cataloged by actual humans. Back before Gmail they were a decent, free, mail provider. Many people continue to use @yahoo.com accounts. Still, it's hard to defend users who visit a site which devotes some front page screen space for horoscopes. I should add most of these things are customizable if you log in, but I wonder how many people go that far. Tyranny of the default must reign here, too.

      • A decade (or more) ago I set my dad up with a .yahoo.com email address and made his home page yahoo.com.

        Now he has shared that email address with so many business contacts that he's locked in for life.

        I'm the same way with my gmail address. I'm essentially locked in as well. They can offer me 5 ways to get my email out (and I do back up my email about once a year) but it doesn't matter if hundreds of contacts have that address.

        • Re:subject (Score:4, Informative)

          by heypete ( 60671 ) <pete@heypete.com> on Monday May 27, 2013 @06:32AM (#43831689) Homepage

          Indeed. That's why I bought a domain ~14 years ago and have used that for all my personal correspondence (business-related stuff, of course, goes to the business address). It's extremely portable: I've switched back-end mail providers maybe half a dozen times in those years (mostly at the beginning when things were getting settled) with no disruption to mail service or needing to change my address. I highly recommend it.

          For migrating to a new address, it's useful to have the old Yahoo/Gmail/whatever address forward to your new one at your domain (or otherwise setup the new system to periodically check for new mail from the old address). This way even contacts who haven't updated their contact list can still have their messages reach you (though you should remind them to update their contact list).

          Having a "portable" address that's not tied to a particular provider is very handy.

    • Is Yahoo a money laundering operation? How the fuck did they have $1Bn lying around to begin with?

      Yahoo is quite profitable and has about $3 billion in cash on their balance sheet as of the end of last quarter. They also generate around $1 billion in profits (excluding one time asset sales) on $5 billion or so in sales. Yahoo is quite profitable and has cash to throw around. Whether they do so wisely is another matter altogether.

  • Comment removed (Score:3)

    by account_deleted ( 4530225 ) on Monday May 27, 2013 @05:02AM (#43831475)
    Comment removed based on user account deletion

  • interesting choice of words (Score:5, Insightful)

    by Trepidity ( 597 ) <{delirium-slashdot} {at} {hackish.org}> on Monday May 27, 2013 @05:11AM (#43831497)

    Note all this discussion of "revenue" rather than "profits". Sometimes it's a useful proxy, but not always. In this case, they're spending $1.1 billion to buy Hulu. If that just gets them some revenue, that is by itself not very impressive, because they start $1.1 billion in the hole! They could've generated, say, $100m/quarter in revenue just by "paying" that money to themselves over the next 3 years. It's only worth buying a company with it if you hope to actually get back more than $1.1 billion!

    • Note all this discussion of "revenue" rather than "profits"...

      Because that is the right metric, because it shows growth, which is kind of what you want in a acquisition, In reality a company already serving web content should absorb all the costs, your right they could buy bonds...or lottery cards with the money, but they seem to be sensibly buying a company where they already have in house expertise, is aligned with their business model, is growing (in a market that is growing)...and has the potential for exponential growth.

      In November 2006, YouTube, LLC was bought b

      • Because that is the right metric, because it shows growth, which is kind of what you want in a acquisition

        Growth without a path to profits becomes a path to bankruptcy. Now Hulu may become wildly profitable in time, I honestly have no idea. But the ONLY argument Yahoo can make for doing such an acquisition without profits is for strategic reasons. Even then, they must have some idea how this thing might turn a profit in the future. The purpose of a business is to make a profit, not to just grow.

        In November 2006, YouTube, LLC was bought by Google for US$1.65 billion(the largest at the time). Its argued today its worth $45.7 Billion

        The link you posted puts the value of Youtube at an implied value of around $8.7 billion. The $45 billion number

    • Re: (Score:2)

      by gl4ss ( 559668 )

      Considering that hulu is doing an actual profit(?) the numbers don't make much sense.
      Sensible paying would be paying an amount that gets you back to black on the deal in 5-8 years provided that the business doesn't bite an unexpected bullet.

  • Google should by hulu (Score:3)

    by zippo01 ( 688802 ) on Monday May 27, 2013 @05:12AM (#43831503)
    Google should by hulu. Think of what they could do. Much better then yahoo.
    • buy* than* And I disagree. Google already has Youtube, and they are adding subscriptions to it. Better to have competition than monopoly.

      • Youtube doesn't have a lot of mainstream TV shows in there. What they need is more deals to get those online. The question is if buying Hulu just to get those contracts would be worth it or not.

  • Just tried to access an old account I had with them, made me reset my password. Like most reasonable people I didn't want to give them any more information than necessary so got stuck when they asked for a phone number. Text on screen:

    "
    Congratulations! You have successfully reset your new password.
    Never lose access to your account.
    "

    Entered "000.000.0000"

    Result:

    "The number you entered is invalid"

    WTF do you want Yahoo? Some way to really identify me? Come on now, you can't be anywhere as near as bad as Facebo

    • GMail regularly nags me to put my cellphone number there as well. Ever since Facebook started using this crap the other major sites have started using this to uniquely identify you thought your phone bill. Stuff them.

  • And again personal data is sold without any permission by the victims. Why can this even be legal?
  • I am a Hulu Plus subscriber. Hulu is a joint venture of NBC, Fox, and Disney-ABC. Hulu only survives on the good graces of its owners who provide the content, and even then they only provide it grudgingly, because they perpetually fear it will undercut their broadcast business. Some of the basic cable guys (TNT, USA, SyFy, etc) also provide content, but mostly because they are also owned by NBC, Fox, or Disney. A few of the smaller cable networks or owners of shows no longer on TV at all also made deals with Hulu, but that's only because they a desperate to monetize otherwise worthless old stuff. Notice that CBS is not a partner, so you generally don't get a bunch of CBS shows available on Hulu. In fact, the CBS CEO recently bragged about this because he said valuable shows are worth more in syndication (i.e. reruns on TV) than online distribution. Even the owners sometimes withhold content. Fox, a Hulu part-owner, only allows the last few episodes of the current season, even to paying subscribers.

    You can bet your bottom dollar that as soon as the TV networks are no longer owners, the good content will disappear from Hulu, even to paying members on Hulu Plus.
    • I am sure yahoo knows that. The value in Hulu is the content and with the price they are offering I am sure there is a clause in the deal that requires them to continue to provide the content as either exclusive or where Yahoo would have access to the content for a period of time before other companies can have access to it.
      Alot of companies, including Google, Amazon and Netflicks, think this is the future of TV delivery so having a deal could help Yahoo.

    • Netflix says "I drink your milkshake". http://knowyourmeme.com/memes/i-drink-your-milkshake [knowyourmeme.com]

      Networks need to watch out. $10 / month gets me all the TV and movies I can watch.

  • Content deals (Score:4, Interesting)

    by brunes69 ( 86786 ) <slashdot@nOSpam.keirstead.org> on Monday May 27, 2013 @10:17AM (#43832773)

    What this article is not mentioning nor any comment thus far asking is the very important question of what happens to Hulu's content deals when it gets sold? There is a reason Hulu has access to next-day TV from NBC, Fox, and ABC... because they own the damn company. There is a reason they have no shows from CBS. If Yahoo! or anyone else buys Hulu, will they still have access to next-day shows from most US networks? Would they lose ABC? Or would CBS come on board? These are very important questions because the US network access is basically the driver for all Hulu subscriptions... no one gets a Hulu account to look at second-rate movies.

  • hilarious (Score:3)

    by slashmydots ( 2189826 ) on Monday May 27, 2013 @12:41PM (#43833661)
    So whenever Yahoo buys something, they stuff it full of 10x the ads then kills it. Unfortunately, Hulu does actually need "more" ads. I mean a higher variety. If I see that stupid Nokia Lumina ad one more fucking time, my head is going to explode. What moron actually thinks forcing me to watch it 50 times while watching a Hell's Kitchen marathon is going to make me buy it? It's just fucking annoying!!! Yahoo cannot possibly do any worse.
    • The point of advertising isn't really to sell. It's to make you aware of the product. It seems to have worked spectacularly well in your case.
  • But it seems as though Yahoo is torn between preservation and relevance. It's kind of like AOL about 10 or 15 years ago.

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