May 28, 2013

Yahoo could be in the running for another technology acquisition

Even though the dust is just beginning to settle after Yahoo announced it would acquire Tumblr, CEO Marissa Mayer is reportedly already searching for another opportunity to strengthen her company's place in the industry. According to the tech blog All Things D, several sources say that the internet giant is considering buying Hulu, the online streaming service. The news source said that Yahoo's bid for Hulu could range between $600 million to $800 million.

"Presumably, she is interested in upping Yahoo's longtime lackluster video efforts—it famously lost out at the last minute on the acquisition of YouTube many years ago to Google—as the arena becomes more critical to advertisers," the article said.

There are several other companies that might be interested in buying Hulu, such as equity firms KKR and Guggenheim Digital or even Time Warner Cable or DirecTV.

CNET explained that Hulu has 4 million subscribers paying $7.99 per month for original programming and more than 70,000 full TV episodes. A technology acquisition of this magnitude would greatly help Yahoo stay competitive in its video efforts and it would bring in much more revenue.

Those 4 million subscribers doubled in the last year, according to CNET, and the recurring revenue stream could also lead customers to pay for other Yahoo services.

However Mayer chooses to approach Hulu, it is clear that she is trying to strengthen her company as technology continues to evolve more each day. Smaller tech firms should also be on the lookout for such opportunities, as their products or services could be widely sought after. When two companies are able to find common ground and work together, it can be beneficial to each of them as well as all of their customers.