Yahoo Joins Growing List of Bidders For Hulu 69
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.'"
With What Money? (Score:5, Insightful)
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)
Where is this $200 million coming from?
A bank?
interesting choice of words (Score:5, Insightful)
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!
Re:subject (Score:5, Insightful)
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.