Top of the Morning Bloomberg reports this morning that Microsoft has dropped out of the auction for Hulu, which jibes with what we hear. According to Bloomberg, Microsoft told Hulu execs last week that it would not proceed to the second round of the bidding process.
As noted in previous posts, we believe Hulu will be a tough sell. Our issues are strategic fit and regulatory concerns, but valuation is also likely to be a sticking point. According to Business Insider, Yahoo set a high bar by offering to pay $2 billion for Hulu provided the current owners guarantee four to five years exclusive access to their content. At those prices, even potential suitors that are interested in Hulu’s business could decide simply to wait out Hulu’s current licensing deals and put in their own bids for the rights when they become available. Read More »