Several reports say that Google is in talks to buy the online video site, Hulu -- as are Microsoft Corp. and Yahoo.
Hulu could be a good fit for Google, whose user-generated video site YouTube is already looking for more premium and original content. Hulu brought in $500 million in subscription and ad revenue last year, the Los Angeles Times reported. Original content from cable and network channels is also part of Hulu's attraction.
Another attraction is that ABC, NBC and Fox have resisted being placed on YouTube and blocked their online programming from Google TV, according to the Wall Street Journal. By buying Hulu, Google would jump over yet another hurdle.
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However, Google wouldn't be buying Hulu's technology and if contracts with networks expire, Google or any other technology company could lose big in the deal.
“If you had those deals for 10 years, OK, you have time to build a business,” Arash Amel, research director for IHS Screen Digest told the Times. “But look at what they are trying to do to Netflix. They help you until you are successful then they want most of what you make or they try to kill you.”
Essentially what makes Hulu valuable is its exclusive online programming. Without that, it's largely indistinguishable from streaming video services like Netflix (and likely not as good.) However, the buy would make sense by filling Google's white elephant, YouTube, with original programming and making their Google TV product stronger.