Google Can’t Say Hello to Hulu Now. (Can It?)
Way down on the list of ripple effects from the Google-Motorola deal: The notion that Google could buy Hulu gets even harder to take seriously.
Prior to today, I kept hearing chatter, none of it stronger than word-of-mouth gossip, that Google really did want to make a run at the video site. That struck me as a stretch, given that Google was already facing a wide-ranging federal antitrust probe, and that adding the video site that dominated the market for “professional” content would be a giant red flag for regulators.
Now it seems like a really, really long stretch.
Google could easily afford to shell out a couple billion for the site, owned by a consortium that includes Disney, Comcast and News Corp. (News Corp. also owns this Web site).
At the end of June, Google had $39 billion lying around, and it makes a couple billion more in profits each quarter. And Google biz dev boss David Drummond made a point of telling investors this morning that the $12.5 billion Google wants to spend on Motorola won’t slow it from making other deals.
But Motorola makes Hulu that much more unlikely for two big reasons:
- Google could certainly argue that it wouldn’t break antitrust rules with a Hulu deal for a lot of reasons. They could note, for instance, that Hulu doesn’t have truly exclusive rights to its programming, but shares the licenses with content owners who show the stuff on their own sites (i.e. Fox.com, NBC.com, etc.). But TV is different from mobile advertising or flight search software — people have an emotional attachment to it, and regulators respond accordingly. Note that Comcast had to abdicate any control of NBC Universal’s Hulu stake as a condition to getting its merger done. It’s that much harder to imagine Washington giving Google the go-ahead to control the online output of three of the four broadcast networks at the same time it is asking for control of a giant handset-maker.
- Even if Google thought it could get the deal done, it would have to convince Hulu’s owners, too. Google says it thinks it can get Motorola approved by Washington by the end of the year, but that seems crazily optimistic — as Citigroup’s Mark Mahaney notes, both ITA and DoubleClick took 9 to 11 months for sign-off. If you’re Disney/News Corp./et al and you decide you do want to sell, you want to find a buyer who can actually make it happen.
Then again, perhaps Google could offer a 63 percent premium and a gazillion-dollar break-up fee as insurance, just like it did with Motorola today, and Hulu’s owners would be willing to take the non-risk. Goohulu may have a very, very low chance of survival, but I can’t call it DOA just yet.