First read: Valuing Hulu; Roku bets on games; deadline in Google books case

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. 

Roku’s got game: Roku adds a Bluetooth-powered, motion-sensitive remote to its latest-generation set-top boxes, making the devices capable off supporting casual games, including Rovio’s Angry Birds, which comes bundled with the new models. The new models also come with the full panoply of streaming services, including Netflix, Hulu Plus, Amazon Instant, MLB, NHL, NBA, MLS, EPIX, etc. They also include a Facebook channel and multiple streaming music offerings.

The move would seem to be a challenge to Nintendo, which has dominated the motion-controlled casual gaming niche with its Wii console but has been behind the curve in adding video streaming. If Roku can slide over into Nintendo’s niche a bit it could be a valuable hedge against encroachment on its own turf by connected TVs with embedded streaming services.

Judge throws the book at Google Books: The judge in Google Books case is running out of patience with the litigants. Judge Denny Chin, who remains stuck with the six-year old case even after moving on to a new job on the Second Circuit Court of Appeals, has given the sides a deadline of September 15 to come up with an acceptable settlement or prepare to go to trial. Judge Chin had rejected an earlier proposed settlement on antitrust and other grounds and the two sides have been trying to reach a revised agreement since then.