By Ronald Grover and Greg Roumeliotis
LOS ANGELES/NEW YORK May 24 Yahoo Inc
has submitted a formal proposal to buy Hulu, joining a growing
list of bidders for the video service owned by News Corp
and Walt Disney Co, two sources with knowledge
of the bid told Reuters on Friday.
Yahoo just this week announced a $1.1 billion acquisition of
blogging service Tumblr. It now joins rival bidders for Hulu,
including Time Warner Cable Inc, DirecTV, former
News Corp president Peter Chernin and Guggenheim Digital Media,
sources have said.
It is unclear how much the Internet company bid.
Sources have said Chernin is bidding $500 million, excluding
an additional sum to cover Hulu's debt and programming
commitments. But a source close to the bidding told Reuters his
offer was too low, that Hulu could be worth as much as $1
billion to $2 billion.
Time Warner Cable's bid was fashioned as an equity
investment, another person said, as the cable operator hopes to
set up a joint venture with other cable companies to operate
Yahoo did not respond to requests for comment. Its shares
closed up 1.2 percent at $26.33.
At least five bidders have emerged for the five-year-old
video service with 4 million users, potentially setting up a
bidding competition. A second source close to the bidding said
the offers submitted so far were non-binding and dependent on
Hulu amending content licensing agreements the bidders found too
Silver Lake, a minority owner of influential Hollywood
talent agency William Morris Endeavor, has also submitted an
indicative letter of interest, the source familiar with the Hulu
bidding said, confirming an earlier Bloomberg report. The
private equity firm teamed up with William Morris Endeavor,
which it invested in a year ago, for the bid, according to the
Hulu, which generated revenues of around $700 million last
year, streams TV shows online in similar fashion to Netflix Inc
. It is being advised in the sale by Guggenheim
Partners, a separately funded group from the digital media unit
that placed the bid.
Yahoo has gone on an acquisition spree to bring in talent as
well as beef up its mobile and online products and content, as
CEO Marissa Mayer tries to revive a once-dominant Internet icon
that has for years bled users.
Yahoo remains one of the Web's most popular destinations,
but has seen its revenue shrink, as consumers and advertisers
favor rivals such as Google Inc and Facebook Inc