Asked about last year’s failed Hulu sales effort and expectations he would move on, Kilar said he sees “many winners” among Hulu and competitors like YouTube, Netflix, Amazon and Apple. “Online video and online video advertising are enormous,” he said.

Last year’s aborted sales effort, Kilar said, was “far more public than I would have liked. I’m a private guy.” Is he surprised he’s still at Hulu? “I’m not.”

Will he be leaving Hulu any time soon? Kilar urged watchers to look at his history, which includes two employers — Amazon and Hulu — since graduating school. “I’m not the kind of guy who dabbles in a lot of things,” he said. “Just judge me on my history, and the team on the history.”

As for the economics of Hulu, Kilar noted (as he has before) that the company made $420 million last year, which was 60 percent more than 2010, but less than the company had expected after a “soft” third quarter.

Hulu Plus, which Kilar described as being in “investment mode,” pays content owners more per user per month than any of its competitors, Kilar said. “The dollars going back to content owners on Hulu Plus are extremely generous.”

Kilar downplayed content negotiations with News Corp., NBC and Disney, the large media companies who own significant parts of Hulu. “Keep in mind we have 330 content partners, three of which we have an equity relationship with,” he said. (News Corp. also owns this Web site.)

It’s not even 8 am PT yet here, but we’ve got a full day of speakers at D: Dive Into Media, and first up is Hulu CEO Jason Kilar. I’m sure we’ll hear him talk about the future of Web video, not to mention his own position and that of his company in said future.

Earlier:
8:08 am: We’re getting just a bit of a late start, as SoCal traffic is messing with the schedule just a bit.

8:19 am: I think we are close now. Attendees are grabbing seats.

8:24 am: Looks like you still have some time to catch up on your favorite show on Hulu. But it shouldn’t be too much longer now.

8:27 am: Here he is.

Peter: I’m a little surprised you are here (refers to memo a year ago that a lot of people thought would get Kilar canned).

Are you surprised you are still running Hulu?

Kilar: No, I am not.

You have to be a bit crazy to do this. He notes that the company was initially called Clown Co.

If it was easy, everyone would be doing it.

8:28 am: What were you thinking when you wrote that memo?

Kilar encourages people to reread the memo. “I think it stands up today.” I actually think that when it comes to bundles, there is tremendous value, but you have to be very careful in how you construct that. Customers vote with their wallets.

8:30 am: Why print the memo?

When you are starting a new business, it’s important to explain yourselves. That was a very important moment for the company.

The entrepreneurial jouney is not a smooth one or an easy one.

8:31 am: Kafka: One of the reasons it was called Clown Co. was the idea that the media companies couldn’t build a successful joint venture, and that the interests of the parents and the company would necessarily diverge.

8:32 am: Kilar: It’s not unique to the history of media. Kilar notes that TV was originally seen as a threat to the movie industry.

It turned out it was the best thing that ever could have happened to content companies. The Internet could be the same way.

8:33 am: Kafka: The broadcast content industry is now getting paid in the form of retransmission fees, and distributing its shows in many forums. Is there the same need for Hulu to exist as there was four years ago?

Kilar: I think there’s more reason for Hulu to exist now than there was four years ago.

8:34 am: Some of the content isn’t there, or is being “windowed.” You have to wait eight days for some shows. Are customers still as happy?

Kilar: There’s actually more content. In addition, we have Hulu Plus (the paid service), which allows customers to get content sooner, and with more content.

Kafka: Is the subscription business a profitable one?

Kilar: Clearly still in investment mode, but a lot of opportunity to make money.

It allows us to pay the content community more per user per month than any other service. “We’re thrilled about that business. It’s a very scalable service. It’s our fastest growing service.”

8:37 am: Kafka: You have to pay for TV, but not for laptop. Isn’t that confusing?

Kilar: Agrees, the distinction might be confusing to our grandkids down the road.

“There’s no doubt there is this transition happening.”

8:38 am: Kafka: How do you think the content owners think about the value Hulu delivers?

If I were in their shoes.

You’ve got this amazingly large business (broadcast TV) that is very robust and very healthy, so you are constantly thinking about that.

At the same time, you can’t be blind to what you are hearing from consumers.

If I were in their shoes, I’d balance the obligation to that existing business, but plant seeds that allow things to bear fruit for the long term.

This is not dissimilar to the introduction of television. People used to go to movie houses three or four times a week to watch “premium content.”

8:44 am: Kafka: What about YouTube and others?

Kilar: There’s going to be many winners in this space. Online video and online advertising space.

Kafka: Why did owners put you on the block then?

Kilar: You should ask News Corp.’s Chase (Carey) this. (Carey is on stage later.)

It’s fair to say the process that happened last year. … We were approached by a company.

Kafka: Yahoo.

Kilar: We never commented on it.

Kafka: Yahoo.

Kilar: It was far more public than I would have liked. I’m a private guy.

Kafka: What do you think happened?

Kilar: Things change … people have different points of view.

It wasn’t dramatic. It wasn’t salacious.

Kafka: One thing that you heard was that the bids weren’t high enough and/or that the content owners weren’t willing to give a long enough rights deal to make it viable.

Could you ever sell this company or take it public? Can this work as a standalone company?

Kilar: We have 330 content partners, only three of which are investors in the company.

Kafka: You’ve said you are going to spend $500 million in content fees this year. Does that include money to main broadcasters?

Kilar: Yes. Main investment is in existing content, though spending a little on new, exclusive content. Gives them some healthy differentiation.

It’s not the thing, but it is an important thing.

Kafka: Is it important to have a lot of exclusive content?

Kilar: It’s important to have some exclusive content.

8:51 am: Kafka: Folks describe you as “rerun TV.” Are you OK with that?

Kilar: At end of day, we search for Hulu and Hulu Plus and see what consumers say. Kilar reads on Twitter a lot, but doesn’t post much.

8:52 am: Audience Q&A. Hulu said it brought in $420 million last year, but less than it had been on a pace to do.

Kilar: In Q3, specifically, the ad market was very soft. Things rebounded in Q4. “We’re pacing very well. I’m not going to talk about the financials of the business.”

Kilar said it was up 60 percent from the prior year, and ahead of its original plan for 2011, which was for $408 million.

Kafka: Will you stick around?

Kilar: I’ve only done two things. One was Amazon for nine years. The other is Hulu. I’m not the kind of guy that dabbles. I tend to go deep.

Kafka: Do you think you will be here in a year?

Kilar: Just judge me on my history.

Kafka: Very eloquent side step. I appreciate it.

8:55 am: TV everywhere. How does Hulu fit into that?

Kilar: Differentiation is important. When we think about services like TV Everywhere, which has been around as a theory for a while … Hulu Plus is designed to be different from TV Everywhere, which only has four or five episodes.

TV Everywhere is getting better, and will continue to, but Hulu Plus is designed to be different.

8:58 am: Hulu Plus for Apple TV?

Kilar: It’s a juicy question. I don’t have a juicy answer. We don’t talk about our product road map.

Q: Can we expect it in 2012?

Kilar: We don’t talk about our product road map.

In a blog post, CEO Jason Kilar blames the shortfall on a “soft advertising market (economy) in the second half of 2011.”

The numbers: Hulu did $420 million last year, via a combination of ad sales and revenue from its Hulu Plus subscription service. But during the first half of 2011, it had told the world — several times — that it was “on pace to approach” $500 million.

In retrospect, it’s easy to see when sales started softening. In July, when Kilar reported his company’s Q2 numbers, he was still offering the same $500 million revenue guidance. But in early October, when he reported Q3 numbers, the guidance had disappeared from his update.

There are a whole lot of people who would like to report 60 percent annual growth. And the fact that Hulu revenue missed earlier projections by 16 percent  – “overall the Hulu ad business grew aggressively and Hulu Plus materially exceeded our plan,” Kilar notes in his post — isn’t going to be the biggest issue for the service by a long shot.

Hulu’s management and its owners — Providence Equity, Comcast, Disney and News Corp. — need to reach a fundamental agreement about the video site’s direction, and how the site fits into today’s entertainment landscape. (News Corp. also owns this Web site.)

But it’s still worth noting the miss, because Hulu is both a digital ad business and a digital ad business that sells very premium video.

It’s an article of faith among digital ad bulls that the industry will keep growing even if the larger economy takes a hit, because ad dollars will shift from old media, anyway. And advertisers are supposed to be clamoring for the tv shows and movies that Hulu sells — which is one of the reasons Google is trying to shift upmarket from dogs on skateboards, with its “channels” strategy.

We’ll start hearing other reports on the state of last fall’s ad market, and the outlook for the future, over the next couple weeks, when public companies start reporting their Q4 numbers.

And we’ll hear a lot more from Kilar himself, who will be appearing at our D: Dive into Media conference at the end of this month. If you want to see him in person, grab a seat.

Whatever you want to call him or her — a silver bullet, the cure or, as I like to say, the last unicorn — Yahoo’s ever-seeking and never-deciding board has now renewed its focus on finding a new CEO.

Also on the docket: Working on a deal to sell back at least some of its stake in its twin Asian assets — Yahoo Japan and the Alibaba Group — back to the companies. A partial sale of stock back could placate the often tense situation among the partners.

What is clear is that the two bids from private equity firms are now in an undetermined circling pattern — due to a variety of concerns around shareholder unrest (Occupy Yahoo looms for 2012).

Therefore, the idea of bringing in said fantasy leader to perhaps finally be the one to revive the long-troubled company has returned to the forefront of action, according to numerous sources both inside and outside the company.

The concept in short, said people familiar with the situation: Hire some compelling and entrepreneurial CEO to get the company moving again from a product point of view, do a massive organizational overhaul and help settle Yahoo’s thorny Asian issues.

While a number of names have been rumored in reports — such as Google business lead Nikesh Arora, who is actually not likely to leave his top post at the search giant — sources said the board has been targeting a number of candidates, including Hulu CEO Jason Kilar.

Others on Yahoo’s wish list include Juniper CEO Kevin Johnson and online advertising entrepreneur Brian McAndrews, who sold aQuantive to Microsoft. There are several others also being considered.

Sources said Kilar has met with Yahoo board members about the offer, but his hiring would be a long shot.

It’s an interesting — if complex — gambit to bring in Kilar, who has had his own wrangles with the multi-owner structure of the premium video service over the years.

Kilar’s status at Hulu has been in question ever since it was put on the block, then removed and then — well — who knows.

Hulu’s owners — News Corp., Disney and Providence Equity Partners, along with Comcast (which is a now a passive investor) — did not like the offers it got from various bidders, including Yahoo.

While the media giants have made noises about wanting to keep a stake in distribution, their commitment to that remains unclear.

The situation has put Kilar — who already had tense relations with the service’s shareholders — in limbo until a valuation is determined next year. Without going into the complex details, Kilar has a large equity stake that could be liquid in April, related to certain rights held by Providence.

It is well known that Kilar has been concerned the team that built Hulu gets some sort of payout for their work. In fact, many years ago, Hulu was seen as a possible IPO candidate.

What’s not in question is Kilar’s talent at creating a cohesive team and a compelling product — especially with an advertising and media focus — and the need at Yahoo for a vibrant leader to encourage innovation and discourage its rapidly increasing attrition issues.

The search for a new Yahoo CEO — which is being led by director Patti Hart, and is being conducted by Heidrick & Struggles — had been mostly sidelined until recently, as the board solicited bids for a partial investment from PE firms.

Two emerged, from Silver Lake and TPG Capital, which had wanted to pay from $16.50 to $18 a share for a stake of just under 20 percent in what is called a PIPE (Private Investment in Public Equity) arrangement.

But the low price, and worries about lawsuits and even a proxy fight related to such a deal, have slowed down the momentum significantly, said sources.

Instead, Yahoo has told bidders it will get back to them in the coming weeks about the direction it will take. Thus, the focus on lining up CEO candidates and plans related to reviving Yahoo.

Some of those possible execs have put their hand up, while others — like Kilar — are being solicited. In addition, some still think that Yahoo board member David Kenny remains an internal option, especially if the board of Yahoo gets a refresh, despite his recent announcement that he has no intention of seeking the job.

In general, this shift should not come has a surprise for the hurry-up-and-wait board of Yahoo, which has struggled over the years to make good choices for the Silicon Valley Internet giant.

That drift has resulted in a downturn in its prospects, even as other companies have surged.

Those troubles were brought into sharp focus in a recent report by new Goldman Sachs Internet analyst Heath Terry, who strafed Yahoo in his “sell” recommendation.

Among the gems by an analyst whose investment bank is currently an advisor to Yahoo on its strategic options:

Yahoo simply faces too many competitive and structural headwinds to believe any kind of meaningful turnaround is possible. While there is significant asset value on the balance sheet and in the company’s large, though increasingly less engaged user base, we continue to believe, as we have since before the first Microsoft offer, that the segment of management driving the company is intent on trying to revive Yahoo as a company, regardless of the cost to shareholders.

And, noting the need for a new CEO:

We would become more positive if we felt there was a likely event in the near term that might unlock the value of the balance sheet assets at Yahoo. While we believe the aggregate value of those assets is above the value reflected in YHOO, in order to be more positive on the stock we would need some proof that management is willing and able to take the steps necessary to unlock that value either through a sale or distribution to shareholders. Meanwhile, the declining profitability of the core display advertising business is masked by a search business that continues to lose share and relies on artificial support from Microsoft. We would become more positive on the core Yahoo business if the company is able to find a new CEO capable of focusing the business on its core advertising and communications opportunities, rationalizing costs, and driving growth. This would require user growth and especially engagement improvements in both online and mobile, improving monetization of advertising inventory, and stabilizing its search business.

In other words: Wanted, one unicorn to work magic against increasingly troublesome dragons. Ability to sparkle a plus.

It’s important to note upfront that Hulu is paying cash for the programming. While the video site — a joint venture between Disney, News Corp., Comcast and Providence Equity — has discussed bringing in another equity partner, that’s not happening with this particular deal.

I don’t have a price estimate for the deal so far, except that it’s going to be significantly less than the value of the Netflix deal — pegged at perhaps $1 billion (maybe more! maybe less) over an eight-to-12-year period — signed earlier this month.

That’s because Hulu will only have access to a year’s worth of content at any given time, while Netflix will eventually have multiple years’ worth of shows available for its subscribers.

Things to note on a Friday afternoon:

• Hulu’s core value is that it aggregates primetime broadcast shows from its three corporate owners: Disney’s ABC, News Corp.’s Fox and Comcast’s NBC (News Corp. also owns this Web site). But CEO Jason Kilar has pushed hard to expand the site’s appeal beyond programming from that trio. Until now his biggest non-network deal has been a Viacom pact for Comedy Central’s “The Daily Show” and “The Colbert Report.” This one could be bigger, simply because it’s three years longer.
• The fact that Hulu has announced any deal at all is interesting given the flux surrounding the site. Until recently, its owners had it on the block, and now that it’s no longer for sale, the next step is to figure out who’s staying and who’s going — both in terms of owners and management.
• While the deal means more content for Hulu visitors, it’s also another part of the Great Free TV Web Pullback of 2011. That’s because unless you’re paying for Hulu Plus, you’ll have to wait eight days after the shows air to watch them online. You can debate the TV guys’ logic here — in short, they think that holding stuff back increases its value, even though lots of people assume it will make it much more likely to be pirated — but this is increasingly going to be the norm.

THE CW AND HULU SIGN FIVE-YEAR LICENSING AGREEMENT FOR CURRENT SEASON PROGRAMMING In-Season Episodes of The CW’s Drama and Reality Series To Stream on Hulu and Hulu Plus

(October 28, 2011) –The CW Television Network, a joint venture of CBS Corporation and Warner Bros. Entertainment, announced today a five-year licensing agreement with Hulu for the rights to stream in-season episodes of The CW’s programming on the Hulu Plus subscription service and the free, ad-supported Hulu service.

With this agreement, Hulu Plus will be the only online subscription service to carry in-season episodes of The CW’s drama and reality series, with the five most recent episodes of each show available to subscribers the next day after broadcast. Users of the free, ad-supported Hulu service will be able to watch five episodes of current season programming eight days after airing on The CW.

Available later this year, programming on Hulu and Hulu Plus will begin with the nine series on The CW’s Fall 2011 schedule, including new series “Ringer,” “Hart of Dixie” and “The Secret Circle,” as well as returning hits “The Vampire Diaries,” “Gossip Girl,” “Supernatural,” “Nikita,” “90210” and “America’s Next Top Model.”

“Our new arrangement with Hulu only affirms the incredible value of The CW’s series, as well as amplifying the immense power of the broadcast network model,” said Mark Pedowitz, President, The CW. “As we increase the amount of year round original programming on The CW, this deal provides our shows with greater exposure on a new platform, helping build even more awareness that will drive viewers back to the network and its affiliates. We see this as a win for everyone involved, the network, the stations, Hulu and ultimately, the viewers.”

“The CW programming is a great example of the kind of in-season content we want to make available on our service – high-quality, engaging, serialized shows that fans passionately love,” said Andy Forssell, SVP of Content for Hulu. “Making these shows available on Hulu and Hulu Plus will allow new and existing fans to get their fix of The CW’s great shows anytime and anywhere.”

The new agreement with Hulu delivers more ways for viewers to catch up with The CW’s serialized dramas and reality series, and provides the network with valuable off-air promotion and marketing to grow its brand, as well as increase awareness for its series. The CW’s content can also be made available online through authenticated cable providers.

The CW, which last year introduced an innovative digital convergence strategy for broadcast and online ad sales, will continue to present its programming on cwtv.com with a full complement of advertising, prior to streaming on the free Hulu service.

According to sources close to the situation, Yahoo has hired Heidrick & Struggles for its CEO search.

It will be a dicey job, since the effort is on a separate track than the Silicon Valley Internet giant’s wide-ranging strategic review, which is looking at a range of options including the sale of the company.

That’s why many see the move as window-dressing for Yahoo’s board, rather than any real interest in hiring a new leader.

Sources said that will make the search a difficult one for Yahoo, since any CEO candidate would be coming into a very volatile situation. In addition, Yahoo has been struggling — Struggles, struggling, get it? — to recharge its advertising and search business and also its product innovation cycle.

That’s the reason — among several others — that the board of Yahoo suddenly fired its former CEO Carol Bartz last month.

Heidrick has worked for Yahoo previously, in the now ill-conceived placement of Bartz by partner John Thompson. A different partner will be handling this assignment, sources said.

The pool of possible CEOs to lead Yahoo is not a large one, but could includes execs such as Juniper Networks CEO Kevin Johnson, Chegg CEO Dan Rosensweig, Skype CEO Tony Bates, John Pleasants of Disney’s Playdom, Hulu CEO Jason Kilar, Facebook COO Sheryl Sandberg and any number of top Google execs, as well as Yahoo board member and Akamai President David Kenny.

(I am, of course, waiting by the phone for the call.)

A Yahoo spokeswoman declined to comment.

HULU EQUITY OWNERS ANNOUNCE DECISION TO TERMINATE THE HULU SALE PROCESS

Los Angeles, New York & Providence, RI – October 13, 2011 – The following is a joint statement from Hulu owners News Corporation, Providence Equity Partners, The Walt Disney Company and the Hulu senior management team:
“Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”

So that ends one chapter of the odd Hulu story. Not a shocking end, because it has never been clear that Hulu’s owners — who include Comcast, Disney and News Corp., which also owns this site — actually did want to hand it off to someone else.

I can save myself some work by quoting from the piece I wrote back in June, when the sale process kicked off, sparked by an overture from Yahoo:

… while it’s natural to think about who might be interested in buying Hulu, it’s the wrong question. The right one: What are Hulu’s owners selling?

More specifically, what kind of content licenses are Hulu’s three broadcast owners — News Corp.’s Fox, Disney’s ABC, and Comcast’s NBC — willing to part with?

Because it’s the TV shows from those three companies that give Hulu almost all of its value. And while those shows have helped Hulu build a big Web business very quickly — Hulu has said it’s on track to generate $500 million in revenue this year — that’s not nearly as important to Hulu’s owners as their core TV business.

That fundamental tension is what led to Hulu CEO Jason Kilar’s Web outburst in February this year, and it’s what has underscored the networks’ recent renegotiations of their distribution deals with the site.

And all of that has been going on while the networks own big equity stakes. If they sell that, then those tensions only increase. Or, put another way: They’ve got even less incentive to make Hulu work. …

So once again we’ve got diverging interests at Hulu. But if push comes to shove, I’m betting on the guys who own the content. And I wouldn’t be surprised if they don’t end up selling a thing.

Next up: Now that Hulu’s owners are keeping the site, what will they do with it — and who will run it? Jason Kilar is still CEO, but prior to this summer’s auction he’d spent months butting heads with his owners, who don’t see eye to eye with him on many things. My gut is they’ll offer him a significant incentive package to stay, but that it won’t be enough.

The firing of Yahoo CEO Carol Bartz leaves open one of the bigger and more difficult jobs in tech — one that has taken its toll on many.

Nonetheless, rapper Snoop Dogg stepped right up to the Twitter plate yesterday, as soon as news broke of the ouster.

Tweeted Snoop Dogg:

“Im takn over as tha CEO of Yahoo. Need sum of tha Snoop Dogg content ya digg. Nuff Said.”

Not nearly nuff!

Thus, while the Yahoo board has yet to begin a search, I have already been hard at work on selecting the next CEO.

(Last time, the company took none of my suggestions, but after the most recent result, the directors might want to pay mind!)

Sources said Yahoo is looking for an experienced Internet type, either from inside or outside the company.

“Yahoo has put its flag in the ground as a digital media company with a technology base,” said one source. “The job requires big buckets of expertise and needs someone who will grow the company.”

Here I go with the outsiders:

Peter Chernin: The former News Corp. exec has been eyeing Yahoo for a possible takeover with other investors. Both Yahoo and I had picked him when co-founder Jerry Yang stepped down as CEO almost three years ago, and he had declined the offer. This time, perhaps a big chunk of the company and total autonomy would work, even if making a hit like “Rise of the Planet of the Apes” is more fun.

Sheryl Sandberg: The COO of Facebook is sort of the anti-Bartz, with a smooth and efficient persona, and she is an experienced tech exec. But the former Google exec is at a place of growth at the social networking site, and is unlikely to want to leave the big show, especially since a blockbuster IPO is looming.

Jason Kilar: The Hulu CEO is in the midst of the process of selling the premium video service, with Yahoo as a bidder. While he has some tense relations with the studios, Kilar is top notch in his dedication to consumer products, and has a lot of experience from his stint at Amazon, too.

Dan Rosensweig: Currently CEO of IPO-headed Chegg textbook rental service, the former Yahoo exec never got a chance to run the company as its top leader. Well-connected and still well-liked by the troops at Yahoo, it still would be pretty hard for him to go home again.

Dave Goldberg: Sure, he’s married to Sandberg (see above), but the savvy CEO of polling phenom SurveyMonkey is one of the sharpest thinkers in Silicon Valley. He sold his music company to Yahoo many years ago and has a strong background in consumer online services.

Jon Miller: The chief digital exec at News Corp. almost got the CEO spot years ago when Carl Icahn was agitating for change at Yahoo, before Time Warner blocked him via a noncompete. With the mishegas at the media giant, and dwindling digital businesses there, it might be a good escape hatch for Miller.

Susan Wojcicki: The accomplished Google exec, who runs all its ad products, has the kind of calm, cool, collected persona that Yahoo could use right about now. The search giant was founded in her garage, and she has been a key part of its success since then. Wojcicki is also an understated class act in hey-look-at-me Silicon Valley.

Todd Bradley: The Hewlett-Packard exec just got blindsided when the company kicked webOS to the curb. While he is in line to run a possible spinoff of the device business, Bradley might also want to jump out of the frying pan into the fire.

Mike McCue: The CEO of Flipboard would certainly energize Yahoo with his intense focus on quality and consumer delight. The news app start-up could be a good addition to Yahoo, and McCue, the former Netscape and Microsoft exec who is well-liked in the Internet scene, would be, too.

Joanne Bradford: The former Yahoo advertising head bolted Bartz’s regime early on to run revenue for Demand Media. Well-liked in the ad business, she also knows where all the bodies are buried at Yahoo. Since ads and media are key at the company, she’d make an interesting choice.

Yusuf Mehdi: The Microsoft online exec would also be a left-field candidate to run Yahoo, given his even-keeled personality and longtime experience in the sector. And, though pricey, Mehdi’s impact on Bing search has been important. But he’s also been involved in the software giant’s lackluster ad and search partnership and still has not turned around the situation at MSN.

Kevin Johnson: The former Microsoft exec and current CEO of Juniper was once slated to be the CEO of Yahoo, had Microsoft managed to win the company in its hostile takeover attempt. In fact, Johnson was the architect of the idea of Yahoo running the media and Microsoft running the tech.

Tim Armstrong: Well, he might have been a good candidate before the downward slide of AOL and a recent series of questionable judgments. If Armstrong can’t keep a loud tech blogger in line, it’s not clear he can wrangle the Yahoo beast.

And here’s the insider scoop:

Ross Levinsohn: The former News Corp. exec is running the Americas for Yahoo, which puts him in charge of the company’s key businesses. But he’s still struggling to turn the ad business around, and how well he does that could be a major determinant of his success. But fantastic hair!

Blake Irving: The former Microsoft exec has an amiable nature and is well-liked at Yahoo, but he still needs to show that the company can ship some innovative products, and quickly. Like Livestand, the news reader, which is muchly late.

David Kenny: The Yahoo board member is now president of Akamai, which might preclude him from the job. But the well-regarded exec — he’s a snazzy dresser, too — ran one of the Internet’s top digital ad agencies and now has tech chops from the content delivery network.

Memo to Yahoo board: I have a million more ideas, from former Viacom exec Tom Freston to former Yahoo board member Eric Hippeau. Or why not bring back a passel of former Yahoos to advise, such as former CEO Terry Semel or former president Sue Decker?

Or Oprah! I hear Winfrey will be in Silicon Valley later this week, and she has a lot more free time now.

Like Snoop Dogg, she would fo shizzle be the bomb to cover.

Related posts

• As Yahoo Continues to Wobble, Investors (And Board) Eye Options
• Exclusive: Carol Bartz Out at Yahoo; CFO Tim Morse Named Interim CEO
• Carol Bartz’s Last F%*& You — Now Aimed at Yahoo Board
• Yahoo’s Statement on Bartz Ouster
• Wall Street Likes Bartz’s Firing — Yahoo Stock Spikes on News
• My Picks for Yahoo’s Next CEO — Maybe Snoop Dogg, Ya Digg?

Except for the part about it not working.

On Aug. 15, Fox will stop distributing its shows on Hulu and Fox.com a day after they air, and will make most Web surfers wait eight days to see them. The only legal way around this, for now, is to pay for a subscription to either the Dish Network or Hulu Plus.

Expect ABC to follow suit, and then NBC. CBS is a reasonable bet, too.

I walked through the networks’ rationale for this last month, when word first got out that Hulu’s broadcast owners — Disney, Comcast and News Corp. — were going to start requiring “authentication” in order to watch shows online the next day. You can read an excerpt at the bottom of the post if you don’t want to click through.

The problem with the networks’ logic: Sidereel.com. And Sceper.eu. And Twitter. And Google. Etc.

All those sites will lead you, quite quickly, to anything the networks air, for free, on the Web. And you don’t have to wait eight days to watch them, or even a single day. You can see them within hours, or less, of their original airtime.

Video piracy is nothing new, of course. But if you haven’t tried watching a TV show from a rogue site recently (and I’m not advocating you do so for any reason other than a professional one — I don’t want a “Wolverine” incident) you might be astonished to see just how fast, and easy, it’s become.

As BTIG analyst Rich Greenfield pointed out to Wall Street earlier this year, it’s now a cinch to download pirated copies of any movie you’d like, in very high quality, using free online storage lockers.

But it’s equally easy to grab TV shows, and you don’t have to worry about downloads if you don’t want to clog up your hard drive: Sites like Videobb.com will offer free streams, without commercials, the same night they air on TV.

Here’s a screenshot of last night’s episode of “MasterChef,” available a couple hours after it aired on Fox (which, like this site, is owned by News Corp.).

And here’s a grab of Tuesday night’s “The Daily Show,” which I was able to watch less than 30 minutes after it finished airing on Comedy Central.

Downsides? Sure. The streams aren’t HD quality — if you got it onto your 42-inch LCD, you’d be disappointed. And the sites seem to require Flash, so they won’t work on an iPhone or iPad. And you may still need a bit of trial and error to get a working version.

And they’re illegal, of course.

But again: They are free, totally serviceable, and very easy to find for anyone who’s remotely motivated.

That was the case before the Great Free TV Web Pullback of 2011, too. But back then (as in, now) if you were a middle-of-the-road TV and Web video fan, it was easy enough to head over to Hulu to watch last night’s “MasterChef.” You’d even put up with commercials.

Now Fox, and very likely the rest of the broadcast TV business, are telling non-pirates to go ahead and grab what they like, when they like. I think they’re going to find lots of takers.

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So why do the networks think this is a good idea? They probably don’t. But it’s a way to prop the business up in the short term, at the expense of the long run.

From my June 23 piece:

Why would Hulu’s owners push to make the service less attractive? The justification I’ve heard is that most Hulu viewers are paying for TV anyway, so this really wouldn’t be a big deal.

But the real answer is that this is meant to appease cable TV providers who are paying Hulu’s owners — via “retrans” deals — for the rights to provide the shows that Hulu is giving away on the Web. And it’s also meant to protect the value of broadcast TV advertising, since the ad business still doesn’t value a Web eyeball as much as one that watches on a TV.

Again, this is the kind of tension between business models that has been a problem for Hulu almost from the get-go. And it has been the source of many of the disagreements between Hulu CEO Jason Kilar and his owners for some time.

Tomorrow, Yahoo will announce its second-quarter earnings and, once again, Wall Street is expecting yet another meh performance from the Internet giant.

In his “cheat sheet” report, Citi analyst Mark Mahaney’s take is pretty typical of the sentiment of investors weary of waiting for a rebound in Yahoo’s growth.

“From $15, we believe YHOO shares have upwards bias,” wrote Mahaney, “but we don’t have real conviction.”

That’s become the unfortunate norm for Yahoo, whose management has continued to struggle with a variety of issues, from its ongoing talent drain to an unexpected and still unresolved fight with its main partner in China to the troubles in its search partnership with Microsoft to the overall lack of ability to turbocharge its advertising and other businesses as has been long promised.

While it is certainly not for lack of trying, the prospect of Yahoo CEO Carol Bartz wheeling out another series of excuses for the lack of turnaround and — something many have been looking for most of all — a clearer strategic vision for the company on the earnings call on Tuesday, will surely not produce a dulcet impact on its depressed shares.

The stock has continued to dip well below $15 a share, down almost six percent last week and 13 percent for the last six months.

That’s why some think that Yahoo’s interest in bidding for the Hulu premium video service, which is being sold by its media giant owners, might be just the bold and risky move to get the company centered around.

With the online video ad business growing and the need for Yahoo to focus its many ambitions, some think Hulu could be a key piece in becoming the “premier digital media company” that the Internet giant has recently taken to calling itself.

By doubling down on what Hulu represents — that would be the premium online video business — it’s a fast-growing category Yahoo’s large sales force would be well-suited for.

In addition, a purchase of Hulu could give Yahoo some much-needed talent in the arena, including its CEO Jason Kilar and others.

“Of all the buyers, Yahoo is the most in need of a purchase to change its paradigm,” said one observer. “If it could not pay too much, Hulu would give Yahoo some differentiating that it really needs.”

Of course, paying too much for Hulu is a key consideration mentioned by all who are looking at it, including Google, AT&T, Amazon and others.

How to determine the value of Hulu’s content licenses, both now and later — given that once those rights expire whoever owns Hulu will eventually have to compete in acquiring the often high-priced material from Hollywood — is the biggest question they are asking.

Is that worth $1 billion or $2 billion? Can a new owner keep up the momentum needed to successfully maintain the Hulu business well after those content rights expire? And, of course, which company would be best suited to accomplish this task?

Yahoo certainly has all the potential to be at the front of that line, despite being managed erratically for far too long. But — also as usual — there is the endless debate internally over whether buying it will fix problems.

Whatever happens, most agree that something dramatic needs to happen at Yahoo, rather than the continual story of flatness that has been coming out of the company for far too long.

And we’ll all see if that’s improved after the close of the market tomorrow, when Wall Street is expecting Yahoo to report revenue of $1.11 billion on earnings of 18 cents.

That’s a revenue decline of two percent, which is not great, especially considering Google’s strong performance last week. Then again, it’s better than the first quarter’s six percent drop in revenue for Yahoo.

Like I said: Meh.

And progress there was. Kilar said the number of Hulu Plus paid subscribers is outpacing projections by a wide margin. “In our first 7.5 months, we are fast approaching the one million paying subscriber milestone (we already have over a million when including those in a one-week free trial period),” Kilar wrote. “We anticipate exceeding one million paying subscribers before the end of this summer; previously we had forecasted crossing that threshold around the end of this year.”

Kilar also touted Hulu’s value to content providers ($8 per subscriber per month), its penetration (now available on assorted devices with a combined installed base of more than 100 million), its content library and its share of the online ad market.

In short, said Kilar, “We remain on pace to approach half a billion in 2011 revenue.”

And then he made a graceful turn and strode back down the runway.

Here’s a handy helper for those following the fate of the Hulu premium online video service, whose noisy efforts to sell itself have gotten a lot of attention of late:

“In preliminary talks” = “hawking itself to one of a half dozen big moneybag tech companies who will visit with Hulu’s bankers and management to see its presentation at Morgan Stanley’s office in Century City in Los Angeles.”

Last Friday, for example, that meant a look-see for Microsoft execs, to show the software giant the story of how paying top dollar for the popular Hulu would be a great investment.

This week, sources said, Yahoo will get the expected gander at the books too, among the other companies targeted by Hulu as part of a sales process in its very early stages.

Among those companies on the short list, sources said, along with Microsoft and Yahoo are: Google, Verizon, AT&T and Amazon.

None of these should come as a surprise, since they all have a big interest in the digital distribution of content business.

Google is perhaps the most interesting and difficult of the group, due to both its massive YouTube unit and the even more massive interest by government regulators about its disturbing massiveness.

Amazon is the company that seems most suited as a Hulu buyer, since it already makes its business selling and distributing content. In addition, Hulu CEO Jason Kilar was a former exec — bringing a certain level of familiarity and presumably much less of the grumpy disgruntlement that he experienced with Hulu’s current media giant owners.

Microsoft seems like the longest shot and least enthusiastic, although it certainly could afford it.

As for Yahoo: Good lord, it needs something sexy to tell weary investors.

Not in the initial round, but other possible acquirers Hulu is targeting: Facebook, Netflix, Samsung and Liberty Media.

And definitely not among those kicking the tires: Disney, News Corp. and Comcast, the trio of partners who own Hulu, along with Providence Equity Partners.

The big question, of course, is whether media-focused Apple — a notorious buyer of almost nothing — would be interested in Hulu.

These blind dates with the best possible buyers will presumably give each insight into Hulu’s business and give Hulu information on what they are looking for.

Sources who have heard the pitch said Hulu is positioning itself as an inevitable competitor to cable, which seems an odd position to take, unless it can get regular access to the kind of top-drawer content that consumers want.

And that will be the most important issue for anyone buying Hulu: The time and terms of rights to the television and movie content on the site, which has been a critical part of its success.

Buyers I have interviewed said Hulu has to offer at least an 18-month license for its content and a pile of rights to hit shows to differentiate itself from competitors.

As Peter Kafka wrote, Hulu buyers would indeed get exclusive content, but with strings attached.

He also noted that the latest content licenses for Hulu’s owner/partners — Disney’s ABC and News Corp.’s Fox — have recently been completed, deals that will stay intact if Hulu is sold.

Unlike Netflix, which has had to pay top dollar for a small pile of premium content while deftly using a large archive of older content to attract subscribers, Hulu’s success has had a lot to do with more access to popular current shows offered by its media giant owners.

Those shows include TV hits such as “The Office” and “Glee.”

That access has become a point of contention with those owners, who have differed with Hulu management about what comes next for the mostly advertising-supported site, even though its slick product has been a clear hit with consumers.

Of course, some speculate that Hulu might not sell at all, just as it never went public as it had said it might do previously. In that case, it will be interesting to see what will become of Hulu once the music stops.

(And, if anyone would like to email me the Hulu presentation or notes on it, please do, so I can formulate a bid myself!)

But, until this deal churns slowly, leakily and loudly forward — let’s enjoy some apt Hulu content. As usual, the fun version of ABBA’s “Dancing Queen” by the kids from “Glee” was not available on the site.

Thus, I selected frequent “Glee” guest star Gwyneth Paltrow belting out Joan Jett’s “Do You Wanna Touch Me” on the show, as a good alternate metaphor for the sales process:

Hulu’s owner/partners — Disney’s ABC and News Corp.’s Fox — have finished their deals extending their content licenses, which have been in the works for a while. As PaidContent noted last week, those deals will stay intact if Hulu is sold. (Hulu’s third owner/partner, Comcast/NBCU, doesn’t have a management role in the company, and has to follow its two partners. So it’s in, too.) That boosts Hulu’s sale value.

The network’s content deals are exclusive, more or less.  It’s theoretically possible for the broadcasters to show their stuff on other online outlets, but they’ve determined that they’ll get the best bang for their buck at Hulu. “We don’t intend to have these shows available anywhere else,” says an executive at a Hulu owner. (Hulu’s three partners continue to have the rights to put their shows up on their own corporate-owned sites.) That’s a big plus for a prospective buyer.

Hulu’s owners do plan to increase the amount of time it takes for a TV show to move from broadcast to the Web site. Right now, almost all broadcast shows end up on Hulu.com the day after they air. But as the Los Angeles Times reported last week, Hulu’s broadcast owners plan to push that window back as much as eight days unless viewers can prove they are cable or satellite TV subscribers. Sources familiar with the site tell me this “authentication” plan won’t kick in right away — for one thing, the systems needed to implement it aren’t built yet. But the fact that it’s in the works could diminish Hulu’s value, since it will limit viewership.

Hulu CEO Jason Kilar might be very happy to see a sale. Kilar’s relationship with his broadcast owners has been strained, and his employment contract is up next month, leading to lots of speculation that he was out the door. A new owner with deep pockets willing to fund more rights deals like Hulu’s Viacom pact might help keep him engaged, though. Another upside to the sale: A chance to cash out the equity stakes Kilar and his employees hold.

Providence Equity Partners, which put up $100 million to seed the company in 2007, has a put option that kicks in during 2012. That could force the broadcast owners to hand over a chunk of cash if the company hasn’t already sold or gone public by then. But people familiar with the company tell me that the option isn’t driving sales talks, and that News Corp. and Disney are willing to make the payments if necessary. (News Corp. also owns this Web site.)

So that helps clear things up, just a bit. We might hear more about other known unknowns — like, when do the new content deals expire? — as Hulu begins opening the kimono for potential buyers over the next few weeks. Ditto for the list of potential buyers, which begins with Yahoo and Microsoft, but extends to just about anyone who can rustle up at least a couple billion dollars.

Also bear in mind that some of the terms discussed above can change if someone shows up with a truly preposterous amount of money. One executive familiar with the company notes the parable of Netflix, where CEO Reed Hastings couldn’t get Hollywood studios to deal with him, until one day they did, because he was able to write significant checks.

And while it’s natural to think about who might be interested in buying Hulu, it’s the wrong question. The right one: What are Hulu’s owners selling?

More specifically, what kind of content licenses are Hulu’s three broadcast owners — News Corp.’s Fox*, Disney’s ABC, and Comcast’s NBC — willing to part with?

Because it’s the TV shows from those three companies that give Hulu almost all of its value. And while those shows have helped Hulu build a big Web business very quickly — Hulu has said it’s on track to generate $500 million in revenue this year – that’s not nearly as important to Hulu’s owners as their core TV business.

That fundamental tension is what led to Hulu CEO Jason Kilar’s Web outburst in February this year, and it’s what has underscored the networks’ recent renegotiations of their distribution deals with the site.

And all of that has been going on while the networks own big equity stakes. If they sell that, then those tensions only increase. Or, put another way: They’ve got even less incentive to make Hulu work.

Remember that we’ve been down this road before. Last year, Hulu and Morgan Stanley floated the notion of an IPO, which went nowhere because the company couldn’t secure long-term exclusive content licenses from its owners.

Since then its owners seem even less likely to make that kind of deal, because the list of potential customers for that stuff keeps getting bigger: Netflix, Apple, Amazon, the Dish Network, Yahoo, etc. Why lock all of them out?

That said, that same list of customers are all potential Hulu buyers, depending on the content they’d get and the price they’d have to pay. And Providence Equity Partners, which helped bankroll the joint venture with a $100 million investment back in 2007, would be happy to see a sale.

Ditto for Kilar and his top managers, who have equity stakes but haven’t had the liquidity that employees at Twitter, Facebook, Groupon and other big-name start-ups have enjoyed.

So once again we’ve got diverging interests at Hulu. But if push comes to shove, I’m betting on the guys who own the content. And I wouldn’t be surprised if they don’t end up selling a thing.

*News Corp. also owns this Web site.

An agreement to extend the content licenses that owners News Corp., Disney and NBCUniversal signed two years ago should be in place within a week, according to people familiar with the discussions.

The pact is being negotiated by Hulu managment, led by CEO Jason Kilar, and officials from News Corp. and Disney. Investor Providence Equity Partners also has a say.

But NBCUniversal, one of the site’s original owners, gave up its board seats and management role in the joint venture earlier this year as part of its Comcast merger agreements; it will have to accept whatever terms its partners arrange.

A Hulu rep provided this statement from Kilar, and said it represented the view of all four companies involved in negotiations:

News Corp, Disney, Providence and the Hulu team have been engaged in productive discussions to extend our existing content agreements a number of years. Keep in mind that our existing Hulu.com content agreements already extend for several more years; these discussions would extend the term further and also extend our separate Hulu Plus content agreements.

Between the operating results and formalizing the above, it is shaping up to be a big year for Hulu.

I don’t have details on the new pacts, but people familiar with the negotiations tell me that the joint venture’s basic structure will remain the same: Hulu.com will continue to be an ad-supported site, while the Hulu Plus subscription service will offer more programming and the ability to watch it on devices like Apple’s iPad.

The new deal terms are unlikely to change things that will be obvious to casual Hulu users. It’s possible that some programs may be withheld from the site, but it’s more probable that the changes will affect things like programming “windows,” which determine when a show turns up on the site and when it disappears, and how much Hulu pays for the content it shows.

The terms may also give content owners more flexibility to distribute their programming on other digital outlets.

Hulu’s original premise was that the site would would have co-exclusive rights to programming from its networks’ partners/owners–shows would stream on the networks’ own sites and Hulu.com, and nowhere else. But my hunch is that programmers will want the ability to offer their stuff to other distributors.

Disney CEO Bob Iger seemed to hint at this during his earnings call this week, when he said that Disney supported Hulu, but not exclusively: “We don’t intend to let a platform—even one we own—get in the way of doing what we think is right.”

The new deal will put to rest any idea that Hulu’s network owners want to kill off the site. That notion has been floated in part because some of Hulu’s original backers, like former News Corp. COO Peter Chernin and NBCUniversal CEO Jeff Zucker, have left their jobs. (News Corp. also owns this Web site.)

More important is that the media landscape has changed since Hulu was assembled in 2007. At the time, NBC and News Corp. officials were primarily interested in building a site that could compete with Google’s YouTube.

Now, Hulu’s owners are trying to extract new and/or increased fees for the programming from cable and satellite services, as well as services like Netflix; offering their shows for free on Hulu makes that harder.

And yet one more question mark about Hulu’s future popped up in February, when Kilar wrote a blog post challenging the TV industry’s business model. The move angered some of his bosses, and led to speculation that he would quit or be fired.

Tempers have cooled since then, but that doesn’t mean Kilar will stick around indefinitely. I’m told that his contract expires in July, and that if he wanted to he’d be able to stay on. I wouldn’t be surprised if he left for something else.

Does that sound familiar? If you’re a fan of Hulu blog posts, it might: The video service announced the same numbers two months ago.

Then: “We expect to approach half a billion in total revenues (advertising and subscription combined) in 2011, up from $263 million in 2010, which was up from $108 million in 2009.”

Now: “We are on pace to approach half a billion dollars in revenue in 2011. In Q1, our revenue grew approximately 90 percent over Q1 2010. (Hulu did $263 million in revenue for all of 2010).”

Then: “Our subscriber count will pass 1 million this year, to our knowledge the fastest start of any online video subscription service. In the fall, we expect Hulu Plus as a business will have a revenue run rate north of $200 million.”

Now: “We are on track to exceed 1 million Hulu Plus subscribers in 2011 (up from 0 in 2010). To our knowledge, this is the fastest start of any online video subscription service.”

Then again, if you’re the kind of person who reads Hulu blog posts, you’ll recall that the most striking thing about Hulu’s February blog post was that CEO Jason Kilar used it to complain about the way his owners–Comcast’s NBC, Disney’s ABC, and News Corp.’s Fox–ran their businesses. (News Corp. also owns this Web site.)

Much of what Kilar said made lots of sense, but the fact that he said it in public didn’t go over well with his network owners. So lots of folks assumed the post was the beginning of Kilar’s end.

Two months later, though, Kilar is still running the video site. And since the metrics he boasted about earlier this year were overwhelmed by the words that surrounded them, it seems fair enough to give them a second viewing.

(And yes, CBS is the only big broadcaster that isn’t part of Hulu. But the site’s search function will send you to CBS’ clips, which is nice of them.)

Of all the many job openings in tech, perhaps the most interesting to watch will be who Groupon selects as its next COO.

The search has been on for a while for the critical hire for the Chicago-based social buying company, well before the recent announcement that it was parting ways with President and COO Rob Solomon.

Among those approached, said sources close to Groupon: Former Doubleclick and Google exec David Rosenblatt.

He’s not taking the job for a variety of reasons, sources said, but
finding someone to step up for the job will be tough, since it is likely to be one that will require a wide range of talents.

That includes: epic cat-wrangling of thousands of employees in far-flung locations; deep marketing and advertising prowess; high-level technology, product, mobile and e-commerce chops; and international experience.

The last is perhaps the most critical of all, since global growth–especially in Europe and Asia–is increasingly becoming Groupon’s main revenue driver, and the COO will have to pull together a crack team across the world.

That will become even more important after Groupon’s top international managers–Germany’s entrepreneurial Samwer brothers–move out of active management by the end of this year.

While company sources said this has been long planned, the Samwers (pictured here) have been fully involved in Groupon’s fast trajectory in Europe and elsewhere, since it bought their Citydeal discounting clone last May.

Thus, sources said, Groupon is looking at a range of candidates with experience abroad, as well as talent in scaling businesses quickly and to huge size.

And that means looking to companies such as Google and Amazon for an exec, where there are quite a few choices.

While BoomTown could not confirm whether Groupon has spoken to any of them, possible COO types are obvious.

At Amazon, some qualified execs include: Sebastian J. Gunningham, SVP of Seller Services; Diego Piacentini, SVP of International Retail; H. Brian Valentine, SVP of Ecommerce Platform; and Jeffrey A. Wilke, SVP of North America Retail.

At Google, there are tons of good candidates that Facebook has not yet raided, including: Stephanie Tilenius, VP of eCommerce; Henrique de Castro, VP of Media and Global Platforms; Dennis Woodside, VP of Americas Operations; and Margo Georgiadis, VP of Global Sales Operations (plus a Chicagoan!).

Other names being raised include Hulu’s Jason Kilar (unlikely, but I’d like it), various Microsoft execs and a spate of others.

(I say, let’s bring in Zynga’s Owen Van Natta, who was once COO of Facebook, since he’s missing a big pile of Groupon stock to add to his enviable collection of hot Web 2.0 company shares.)

While there are probably qualified execs outside the tech industry at retail and media outfits, sources said it is likely Groupon will select within the digital ranks.

Lastly, and perhaps most important, the Groupon COO candidate is going to have to accept that the role will not be a CEO-in-waiting, either before or after its inevitable IPO in the next year.

While I have received several tips that Co-founder and CEO Andrew Mason (pictured here) might not stay its principal exec, extensive checking with sources inside and outside the company indicate that such a move is highly unlikely.

“Andrew is beloved to the board, by investors and, most of all, by employees,” said one source. “He’s not going anywhere.”

Indeed, Mason has a close working relationship with Co-founder Brad Keywell, as well as Groupon Co-founder and Chairman Eric Lefkofsky.

In fact, despite other business interests, Lefkofsky has been very involved in all key decisions with Mason.

That job, presumably, would fall to the new COO, which Groupon should be hiring sooner rather than later.

“Groupon needs a world-class COO, who can manage hyper-growth, but also who knows that a No. 2 stays in the background while doing it,” said another source. “That’s a tall order.”

As we await the decision of which uneasy head gets the COO crown at Groupon, here is the opening from the Swisher boys fave Animal Planet cable television show, “Must Love Cats,” to get you in the mood:

So you can see why CEO Jason Kilar is trying to build up a roster of his own shows — either stuff Hulu commissions itself, or stuff other studios bring to his site before they go anywhere else on the Web.

AdWeek’s Mike Shields reports that Hulu has “been quietly building out two separate content divisions” — one for “branded entertainment” (shows built-to-order for specific marketers, who get to weave their products or branding directly into the programming) and another focused on “niche comedy and documentaries.” (Intriguingly, Shields also says Hulu is planning a “major integration with Facebook” but doesn’t offer more details).

We’ve already seen a bunch of Hulu originals, from “If I Can Dream” reality show to the “Morning After” clip show it launched earlier this year.

Last week the company started airing “Trailer Trash“, a series of 5-minute cartoons in the Beavis and Butt-head mold, produced and financed by Lionsgate and Hudson Media. Later this year we’ll see a serial thriller starring Kiefer Sutherland, and a cartoon from LeBron James. Title: “The LeBrons”.

None of this stuff is going to rival “Lost” or “The Office” or “Family Guy”. And if any of that stuff goes away, it’s going to be a big problem for Hulu. But that’s not likely to happen — I’d be very surprised if Disney’s ABC or Comcast’s NBC or News Corp.’s Fox bailed on Hulu altogether (News Corp. also owns this Web site).

More likely: Some of the stuff that runs on Hulu now takes longer to get there, or stays there for a shorter window, or becomes more expensive for Hulu to show. Or perhaps all of the above. In that case, it’d be nice for Kilar and company to have their own shows on hand to help soften the blow.