This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Who Really Wins In Hulu Bidding?

Stocks in this article: DTV DIS CMCSA NWS AAPL GOOG YHOO

NEW YORK ( TheStreet) -- It was recently made public that the most likely candidate to walk away with the rights to Hulu, the popular video streaming site, would be DirecTV (DTV).

The deal is reportedly worth a little bit more than $1 billion and will be split between Disney (DIS), Comcast (CMCSA) and News Corp. (NWS), the three joint owners of the site.

The estimated $1 billion is a steep dive from what the owners were looking to get a year ago. In fact, it's about 50% less to be exact. However at the time, the terms included exclusive long-term rights to the content (from ABC, FOX and NBC). Now it does not.

So it is possible that the content owners could double dip on the deal, first with the initial sale and then with content licensing.

You could argue that both parties walked away with a win. DirecTV needed something to boost their simple business model of rooftop satellite dishes and the owners were able to unload Hulu for a cool one billion bucks.

But the question isn't who the biggest winner in all of this is, but rather, who isn't. Yahoo! (YHOO) was reportedly looking to spend $600 million to $800 million on a deal to acquire Hulu.

While the deal (which is unofficial) fetched a couple hundred million more than Yahoo! was looking to spend, should it have chased the price a bit higher? Last month, CEO Marissa Mayer made headlines when she went out and picked picked up Tumblr for $1.1 billion.

Since the move was made in an effort to increase traffic -- specifically, from young adults -- wouldn't it seem prudent to spend a similar amount in a bid for Hulu? I mean, it has more than 4 million paying subscribers, which is double that of a year ago and helped generate almost $700 million in the last last year alone.


Even without the revenue figures, the company had more than 24 billion minutes viewed in the month of May and users watched more than 1 billion videos last quarter. With the average session lasting 45 minutes, it certainly has the engagement of its users, which is exactly what Yahoo! is looking for.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs