Google in early talks to buy Hulu

Google has entered preliminary talks to acquire the online video site Hulu, the LA Times reported on its website Friday, citing anonymous “sources familiar with the discussions”.

Hulu’s owners have met with Google and other prospective buyers including Yahoo! and Microsoft, the newspaper reported.

The site, which broadcasts television shows through on-demand streaming, is owned by a trio of traditional media giants — Disney, NBC Universal and News Corp. — and private equity firm Providence Equity Partners.

Founded in 2008, Hulu is only available in the United States. It lets users watch a selection of television shows for free with advertisements, though subscribers can also pay a fee to watch the shows on connected televisions or gaming consoles.

Google is already a major presence in the online video market through its control of YouTube, and a tie-up with Hulu would further consolidate the web search giant’s strength in internet broadcasting.

YouTube is currently the top online video sharing site in the world and boasts more than 100-million unique visitors per month. It has also launched a streaming rental service, which recently expanded to include more than 3 000 new titles.

Last month, The Wall Street Journal reported that Hulu had been approached by a potential buyer after having renounced its desire to go public.

According to a Huffington Post report, Hulu is projected to make US$500-million in revenue for 2011, based on advertising and subscriptions.

The LA Times notes that a sale would “allow Hulu’s media owners to make a graceful exit from a service whose success nonetheless created friction with traditional business partners. Cable and satellite distributors complained about paying for the right to carry programs that Hulu offered free online. A transaction would also enable owner Providence Equity Partners, which put US$100-million in the venture, to see returns from its investment.”

If Google manages to purchase Hulu, the acquisition would give Google the opportunity to stream more professional content. Hulu currently maintains a number of licensing deals for highly watched programs like Fox’s “Glee” and NBC’s “The Office.” –Additional reporting from AFP.