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.
The entry of Yahoo, which said this week it’s buying the blog service Tumblr Inc. for $1.1 billion, brings the number of bidders to at least seven, including the new private-equity suitors.
It also underscores the value the parties see in Web streaming services such as Hulu and Netflix Inc. One potential buyer has offered at least $830 million, including about $330 million in assumed debt, one of the people said earlier.
The long list of bidders for Hulu includes former News Corp president Peter Chernin, DirecTV, and Time Warner Cable and private equity fund Guggenheim Digital Media.
According to the Bloomberg report private equity firms KKR and Silver Lake Partners are among the bidders for the site. Bloomberg notes that Hulu’s advertising revenue was up 65 percent last year to $695 million.
The value of their offers wasn’t immediately known.
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.
“Video is migrating to the Internet,” said Brett Harriss, a Gabelli & Co. analyst in Rye, New York. “Hulu is a great platform to use as a base to build an Internet video business.
Hulu is currently owned by Walt Disney Co., Comcast’s NBCUniversal, and News Corp, and the company has been looking for buyers since March.
The three media conglomerates provide the site’s most valuable programming, primarily via shows that have already aired on their broadcast networks.
News Corp and Disney have been at odds with one another in discussions about Hulu’s intended direction, according to The Wall Street Journal. News Corp has argued that Hulu should focus on growing its subscription service, while Disney thought the free service should be the Hulu’s focus.
In 2011, Hulu’s owners put the company up for sale and were looking for a bid of at least $2 billion; in exchange, they would offer content licenses that would run for two to three years. But they ended up pulling the site back off the sales block after a few months.
Without those rights, Hulu by itself is a very pretty Web site and video platform, but not worth the billions it would be with very long-term television rights, content that attracts users, informs All Things D.
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 also bought gaming company PlayerScale on Thursday. Yahoo’s bid for video site Daily Motion was blocked by the French government earlier this month. Daily Motion is, like Hulu, a popular online hub for video content.