Yahoo goes after younger, mobile users with reported Hulu bid

CEO Mayer tries to refresh Yahoo with strong video acquisition

With Yahoo CEO Marissa Mayer taking steps to transform the company back into a top-tier player, reports are out that Yahoo is in talks to buy Hulu for as much as US$800 million.

Yahoo bid between $600 million and $800 million for Hulu, a video site known for streaming TV shows and movies, according to All Things D.

Neither Yahoo nor Hulu have responded to requests for comment. If the reports are accurate, though, Yahoo could be on an acquisition spree.

These latest reports come on the heels of Yahoo's announcement earlier this month that it would acquire blogging service Tumblr for $1.1 billion. In March, Yahoo said it would buy Summly, a London-based company that developed an app for condensing information, making it easily and quickly readable on mobile devices. The purchase was of special note since Summly was owned by Nick D'Aloisio, a 17-year-old high school student.

Mayer, who is still in her first year as Yahoo's CEO, has said that taking advantage of the burgeoning mobile market is part of her plan to rebuild the company, which was once an online pioneer but has since faded to become a B-level player in the Internet market.

In January, Mayer said mobile products are "incredibly important to our strategy." To that end, Yahoo recently acquired the mobile recommendations app Stamped and the video chat broadcasting app OnTheAir.

Buying the privately held Hulu, which is a considerable player in the online video market, would be a smart move, according to Dan Olds, an analyst with The Gabriel Consulting Group.

"This finally gets Yahoo into the high-growth video content game," Olds said. "As entertainment delivery and consumption patterns change, having a video delivery platform is a key piece to being a player in this burgeoning market. This could turn Yahoo into a destination site for folks who want to consume their entertainment over the Web, either in the living room or on any other device."

Zeus Kerravala, an analyst with ZK Research, noted that Yahoo has almost no video presence, and Hulu could give the company a platform and an audience.

"Obviously it's not YouTube, but it may be the best video platform out there for sale," Kerravala said. "Yahoo needs to become appealing to the younger, mobile generation. There's just nothing about legacy Yahoo that is."

Kerravala also noted that since Yahoo should have deeper pockets than Hulu, Yahoo could bring new functionality and new features to Hulu.

Both Kerravala and Olds said Mayer is working hard to turn the company around, and one of the first orders of business seems to be rounding out the company's portfolio with a series of acquisitions.

Those acquisitions are aimed squarely at a younger, more mobile user base.

Mayer, who was a top executive at Google, arrived at Yahoo last summer with the mandate to return the company around and create excitement around the brand.

Earlier this year, she kicked off the revamp with a new look for Yahoo's homepage.

This article, Yahoo goes after younger, mobile users with reported Hulu bid, was originally published at Computerworld.com.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

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