MAY 27- After taking a big leap with a $1.1 billion deal for Tumblr, Yahoo is now bidding for online video site Hulu, according to media reports.
Hulu, which is on sale again, has also attracted pay TV operators DirecTV and Time Warner Cable among the seven bidders.
Yahoo announced the online blogging forum Tumblr deal on Monday. The deal represents CEO Marissa Mayer’s boldest move yet since she left Google 10 months ago to lead Yahoo’s latest comeback attempt.
Tumblr deal marks Yahoo’s most expensive acquisition since the Sunnyvale, California, company bought online search engine Overture a decade ago for $1.3 billion in cash and stock.
The Walt Disney Co. and News Corp. control Hulu through their broadcast subsidiaries, ABC and Fox. Comcast Corp., owner of NBC, is also an investor, although it gave up its say in Hulu’s affairs as a condition of its purchase of NBCUniversal in 2011.
Hulu’s owners tried to sell the site before, but decided against it in 2011 after months of entertaining outside offers. Talk of a sale resurfaced after CEO Jason Kilar announced in January that he would step down at the end of March. Since then, Hulu has been led by interim CEO Andy Forssell.
Hulu made $695 million in revenue last year and said in April that more than 4 million customers pay $8 a month for Hulu Plus. Both Disney and News Corp. have said Hulu is losing money.
The ad revenue is small compared to the billions of dollars made on traditional TV, and Hulu lags far behind Netflix in paying subscribers. Netflix boasts 29.2 million subscribers in the US alone.
Hulu could also be a contributing factor to viewers choosing to cancel traditional pay TV packages, which are far more expensive, in favor of watching video over the Internet.
Representatives for DirecTV Group Inc., Time Warner Cable Inc., KKR, Silver Lake and William Morris declined to comment. Spokespeople for Yahoo Inc. and Guggenheim did not immediately return messages seeking comment. A representative for The Chernin Group could not immediately be reached.
