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Yahoo Joins Growing List of Bidders For Hulu
An anonymous reader writes "It's reported that Yahoo has formally put in a bid to buy Hulu only a week after adding Tumblr to the family. From the article: 'Yahoo just spent $1.1 billion of its cash hoard to acquire Tumblr, a blogging site with 300 million mostly young-ish visitors and 24 billion minutes of usage per month. Yahoo CEO Marissa Mayer's team can slap a lot of tasteful, personalized native ads into the Tumblr content streams to monetize the fast growing site. It's the same way that Facebook and Twitter hope to get into the tens of billions in revenue league, but it's a long and winding road. Now Yahoo is taking a run at Hulu, with its 4 million subscribers paying $7.99 per month, original programming , and more than 70,000 full TV episodes. Hulu could immediately put Yahoo's video efforts and revenue in a different league.'"
Yahoo spent 1.1billion of 1.2billion in cash reserves to buy Tumblr. Where is this $200 million coming from?
Also, 300million seems low considering Hulu actually has decent revenue compared to Yahoo's other acquisitions which have lower revenue and were purchased for far more. E.g. Tumblr had $13 million in revenue last year, yet was purchased for 1.1billion; Hulu had $695 million in revenue the same year, 53 times that of Tumblr. Buying it for 1/4 the price would be a steal.
Hopefully, Hulu will refuse to be bought by a company so irresponsible with its money, or for an amount less than half of its yearly revenue.
Tumblr: Known for it's stupid amount of porn!
Is that what invades the stores on Black Friday?
"cash hoard", not "horde".
pump and dump
Is Yahoo a money laundering operation? How the fuck did they have $1Bn lying around to begin with?
What are you, stupid?
Note all this discussion of "revenue" rather than "profits". Sometimes it's a useful proxy, but not always. In this case, they're spending $1.1 billion to buy Hulu. If that just gets them some revenue, that is by itself not very impressive, because they start $1.1 billion in the hole! They could've generated, say, $100m/quarter in revenue just by "paying" that money to themselves over the next 3 years. It's only worth buying a company with it if you hope to actually get back more than $1.1 billion!
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Google should by hulu. Think of what they could do. Much better then yahoo.
Even CNET cannot be arsed to proofread their own scribblings any longer.
Note all this discussion of "revenue" rather than "profits"...
Because that is the right metric, because it shows growth, which is kind of what you want in a acquisition, In reality a company already serving web content should absorb all the costs, your right they could buy bonds...or lottery cards with the money, but they seem to be sensibly buying a company where they already have in house expertise, is aligned with their business model, is growing (in a market that is growing)...and has the potential for exponential growth.
In November 2006, YouTube, LLC was bought by Google for US$1.65 billion(the largest at the time). Its argued today its worth http://www.valuewalk.com/2012/03/google-inc-goog-youtube/ [valuewalk.com] $45.7 Billion Ironically in the context of this article Google outbid Yahoo. In terms of numbers http://allthingsd.com/20100319/the-numbers-behind-the-worlds-fastest-growing-web-site-youtubes-finances-revealed/ [allthingsd.com] youtube revenue for the year before the sale to Google was $15,057 (whole making losses of hundreds of thousands each month)
There are problems but those are nothing to do with the figures...acquisitions often take time to merge successfully if at all. The fact that there is incredible competition from known established large companies (Youtube;Netflix Amazon etc)...with others controlling the ecosystems (Google, Apple, Samsung, Microsoft), and more.
I wish people would stop looking at financial figures in isolation..its just stupid.
Yahoo spent 1.1billion of 1.2billion in cash reserves to buy Tumblr. Where is this $200 million coming from?
Yahoo has about $3 billion in cash and equivalents as of their last quarterly statement. Additionally, purchases don't have to be made in cash on hand. The company could be bought using cash, stock, options or some combination of the above. Additionally the company could issue debt to raise the capital to fund the acquisition. Also they could partner with someone on the buyout.
For what it is worth, $300 million was last quarter's profit for Yahoo.
Also, 300million seems low considering Hulu actually has decent revenue compared to Yahoo's other acquisitions which have lower revenue and were purchased for far more.
Is it 1999 again? I thought the dotcom bubble burst. Here's why revenue doesn't matter. I can generate vast amounts of revenue selling $2 bills for $1. I'll have huge sales doing so. I'll also be bankrupt faster than you can say "Chapter Eleven". The only reason to use a revenue multiple for a buyout is because the company is not profitable and has limited prospects of becoming so.
The amount of revenue they generate is irrelevant unless it leads to profits. I've seen reports that Hulu has turned a profit though it is unclear how much or what the future prospects might be. Revenue without profits can only be a short term situation. Sometimes doing so makes sense for strategic reasons (see Amazon) but there MUST be a path to profitability. Either Hulu must be strategically vital or it must have future profit opportunities Yahoo is aware of and I am not.
Hopefully, Hulu will refuse to be bought by a company so irresponsible with its money, or for an amount less than half of its yearly revenue.
It's quite possible that a price of 0.5X revenue is a fair price. It might also be too high or too low. Typical multiples of revenue for buyouts are between 0.6X and 1.2X annual revenue for a profitable company. Varies by industry. Depending on Hulu's future prospects, a 0.5X revenue multiple might be a fantastic price for its shareholders. However that also likely means it is a questionable deal for Yahoo financially.
Is Yahoo a money laundering operation? How the fuck did they have $1Bn lying around to begin with?
Yahoo is quite profitable and has about $3 billion in cash on their balance sheet as of the end of last quarter. They also generate around $1 billion in profits (excluding one time asset sales) on $5 billion or so in sales. Yahoo is quite profitable and has cash to throw around. Whether they do so wisely is another matter altogether.
Because that is the right metric, because it shows growth, which is kind of what you want in a acquisition
Growth without a path to profits becomes a path to bankruptcy. Now Hulu may become wildly profitable in time, I honestly have no idea. But the ONLY argument Yahoo can make for doing such an acquisition without profits is for strategic reasons. Even then, they must have some idea how this thing might turn a profit in the future. The purpose of a business is to make a profit, not to just grow.
In November 2006, YouTube, LLC was bought by Google for US$1.65 billion(the largest at the time). Its argued today its worth $45.7 Billion
The link you posted puts the value of Youtube at an implied value of around $8.7 billion. The $45 billion number comes from (inappropriately) applying implied multiples for Facebook which have little relevance to Youtube. Frankly the assumptions the author used to get to the $8.7 billion number are a iffy at best.
Just tried to access an old account I had with them, made me reset my password. Like most reasonable people I didn't want to give them any more information than necessary so got stuck when they asked for a phone number. Text on screen:
"
Congratulations! You have successfully reset your new password.
Never lose access to your account.
"
Entered "000.000.0000"
Result:
"The number you entered is invalid"
WTF do you want Yahoo? Some way to really identify me? Come on now, you can't be anywhere as near as bad as Facebook.
Time is what keeps everything from happening all at once.
And again personal data is sold without any permission by the victims. Why can this even be legal?
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
I am a Hulu Plus subscriber. Hulu is a joint venture of NBC, Fox, and Disney-ABC. Hulu only survives on the good graces of its owners who provide the content, and even then they only provide it grudgingly, because they perpetually fear it will undercut their broadcast business. Some of the basic cable guys (TNT, USA, SyFy, etc) also provide content, but mostly because they are also owned by NBC, Fox, or Disney. A few of the smaller cable networks or owners of shows no longer on TV at all also made deals with Hulu, but that's only because they a desperate to monetize otherwise worthless old stuff. Notice that CBS is not a partner, so you generally don't get a bunch of CBS shows available on Hulu. In fact, the CBS CEO recently bragged about this because he said valuable shows are worth more in syndication (i.e. reruns on TV) than online distribution. Even the owners sometimes withhold content. Fox, a Hulu part-owner, only allows the last few episodes of the current season, even to paying subscribers.
You can bet your bottom dollar that as soon as the TV networks are no longer owners, the good content will disappear from Hulu, even to paying members on Hulu Plus.
What this article is not mentioning nor any comment thus far asking is the very important question of what happens to Hulu's content deals when it gets sold? There is a reason Hulu has access to next-day TV from NBC, Fox, and ABC... because they own the damn company. There is a reason they have no shows from CBS. If Yahoo! or anyone else buys Hulu, will they still have access to next-day shows from most US networks? Would they lose ABC? Or would CBS come on board? These are very important questions because the US network access is basically the driver for all Hulu subscriptions... no one gets a Hulu account to look at second-rate movies.
Compared to that, Hulu's a bargain.
But it's Yahoo, so they'll still find a way to make it fail.
So whenever Yahoo buys something, they stuff it full of 10x the ads then kills it. Unfortunately, Hulu does actually need "more" ads. I mean a higher variety. If I see that stupid Nokia Lumina ad one more fucking time, my head is going to explode. What moron actually thinks forcing me to watch it 50 times while watching a Hell's Kitchen marathon is going to make me buy it? It's just fucking annoying!!! Yahoo cannot possibly do any worse.
didn't think so. 'nuff said.
this is a very resourceful post. Every visitor should read it. Thanks to the writer.
alherabd
Shahidul.
except this question was already asked by HighOrbit. Any comment thus far my ./
But it seems as though Yahoo is torn between preservation and relevance. It's kind of like AOL about 10 or 15 years ago.
They just messed up Flicker! In just a couple days time they racked up over 30k comments, most negative, in the Flickr Help forums re the new layout.