Google Is Getting Close to Buying Hulu. Has “Big Ideas” for It

August 31, 2011
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Six companies have been included in the formal bidding for Hulu, and 3 of those are Google, Amazon and Yahoo. Google, apparently, is the main favorite in the bidding, although Amazon is a strong contender, and Yahoo is just kept around for the show to help increase the biding. I doubt the Hulu CEO and owners would want Hulu to be owned by Yahoo, unless they actually intend to get it killed to preserve their offline profits. Amazon is kind of a favorite because the current Hulu CEO has worked for Amazon before, but that might not matter much because the owners of Hulu will have a bigger say in this than he does. But Google is not only considered a favorite in the bidding, but they are also one of the few who keeping bidding high right now. They have more money than Amazon, so if they really want it, Google will get Hulu.

As soon as I heard that Hulu was for sale, I immediately thought that Google would be the perfect match for it, and I started thinking about what they could possibly do with it. Here are some use cases for Hulu, that I think Google is also considering.

#1 Google TV 

This one is the most obvious use they would find for Hulu. Hulu is currently blocked for Google TV, because the same owners that want to sell Hulu now, wanted to first cut a deal with Google, even though Google didn’t owe them anything. But they were too upset about Google bypassing them altogether on people’s TV’s. If Google does end up with Hulu, though, I expect Google’s relationship with the networks to get a little better, too, and they might even allow a few of their channels on Google TV besides Hulu.

But even if that doesn’t happen, at the end of the day Google will still have Hulu, which could have a powerful effect on the sales of Google TV set top boxes (of course, they still need to stop selling them for $300 first). I’m sure Google wouldn’t stop there either. The new content deals for Hulu will last 5 years. After that the networks might not want to renew their deals with the company owning Hulu then, because they might not care about it anymore, unless they are making a lot of money from it by then, but they could still make the deals very unfavorable. So if Google buys it, they’d immediately start to look for new shows that they could show exclusively on Hulu, and therefore cut their dependence on the networks.

#2 Advertising 

Even outside the current bidding, Google is still the best match for Hulu because of one thing – advertising. Hulu is a service mostly based on online advertising. And who dominates online advertising? Google. But why would you care about this? Well, first, it means that the service will have a lot more life in it, and Google can actually expand it and get some great exclusives if it can make a lot of money.

But perhaps more importantly, if you’re outside USA, is that Google is probaby the only company right now that can finally make Hulu a global service – for free. Hulu hasn’t expanded internationally because they couldn’t get enough advertisers to advertise abroad. But Google already has relationships with many advertisers abroad, which is why I foresee an international free ad-based Hulu relatively soon after the acquisition.

As a bonus, Hulu has relationships with 600 video advertisers, that Google could use to strengthen the advertising on Youtube as well.

#3 Android

How can we forget about Android! Android is already a huge platform with over 150 million users worldwide, and the best part is that it keeps growing – the potential is billions of users. They could put Hulu on all these Android phones and tablets by default. That would quickly make Hulu a huge global media entity, and they would much more easily be able to get exclusive shows on it. The best part? It will remain free.

This would also strengthen Android even more, because it will have a great service that many people will want to use. I assume they’d still allow it on other platforms, but it might not be free, especially if they build some special ads for it that take advantage of the OS.

#4 Google+ Circles

Hulu has recently gotten Facebook Connect, which is supposed to help recommend you shows, from the shows your “friends” are watching. The problem is that on Facebook that recommendation could be seriously skewed, because most of the people you have in your list, might not be people you know very well, or have too much in common with them. Plus, they’ve already had some security issues with that, and they had to disable Facebook Connect in the same day they launched it.

With Google+ Circles, the algorithm should much better tell what you might like to see because it would look at the viewing habits of your “real friends”. It might even allow you to select the circles you want to use for the recommendation. That way you could even build your own circles with people you specifically know they have similar tastes with you.

#5 Hangouts

Google has already introduced Youtube videos in Hangouts, so you can watch a video in the same time with your friends and discuss about it, just like you would if you would be together in the real world and watch TV. It’s not too crazy to think that Google would do the same with Hulu. If they implement it well, this would also help Hangouts become more popular, and also Google+ in general.

So, Hulu would not just be a smart buy in relation to Google TV, but it would also affect many of their other products in the future. Can you find other interesting ways in which Google could use Hulu?

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