Hulu Decides to Quit Shopping for a Buyer

The owners of Hulu have dropped the plans to sale the online video streaming website after a long fruitless attempt at finding a decent bid for the site.

Hulu’s owners, which include NBC Universal of Comcast Corp. (NASDAQ:CMCSA), Fox of News Corp. (NASDAQ:NWSA), Disney’s (NYSE:DIS) ABC and Providence Equity, decided on Thursday that they are calling off the sale of the video streaming service.

It was reported last month that the bidding process was on the edge of being derailed over the disagreement with the bidders and owners for the convoluted digital rights of the television series and movies. Other conflicts cited were a lack of interest from potential bidders and a wide bid ask gap that was being asked by the owners of Hulu. In the end the decision was taken over the low price offered by bidders.

This makes it the second time that the board of Hulu has decided for a exit strategy that went nowhere. The owners decided to go for an auction after a six month long planning process. The owners also cancelled a planned initial public offering that would have raised more than $300 million for the video streaming website.

Bidders included Google Inc., DirecTV, Amazon.com Inc. and DISH Network Corp. The bids offered ranged between $2 billion to $500 million. The owners were hoping for bids exceeding $2 billion. Yahoo Inc. was also rumored to be interested in Hulu, however the debacle of Carol Bartz from the post of Chief Executive Officer led to cancellation of the plans.

In the hopes of making the deal attractive, Hulu has been adding new content from NBC, Fox and ABC. The website was also said to be in talks with Univision to add Spanish language content, attracting a whole new segment of audience.

Hulu has about 1 million subscribers who pay $8 as monthly fees. According to the CEO of Hulu, Jason Kilas, the company is set to make more than $500 million in revenue in 2011. Hulu’s biggest competitor, Netflix has 24.6 million subscribers. Netflix announced last month that it is expecting around 600,000 subscribers to leave after its decision to increase the subscription prices by 60 percent and also split the company’s DVD by mail services. The decision was later however reverted.

According to reports from ComScore Inc., the viewers on Hulu view more advertisements, even though the traffic on Hulu is lower than that of sites such as YouTube Inc. and others.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.