Who Will Buy Hulu? Most Likely an Internet Giant with Cash

Peter Chernin quashed a rumor going that he was gathering a group of investors to buy Hulu. “No, it’s not true,” he told me on Monday

With the video streaming site Hulu on the auction bloc, speculation is rife around town of who might buy it.

Peter Chernin quashed a rumor going that he was gathering a group of investors to buy Hulu. “No, it’s not true,” he told me on Monday.

Too bad for CEO Jason Kilar. That might have been the best outcome, since Chernin was at one time one of his most stalwart supporters.

But at this point it seems unlikely that a content company will buy the start-up streaming-service-turned-giant.

Read also: Hulu Hires Investment Banks After Unsolicited Offer 

For whatever reason, the air has gone out of Kilar’s relationship with his partners, News Corp., Disney and NBCUniversal. It’s partly because Chernin and Kilar’s other ally, NBCU's Jeff Zucker, is gone.

But also because News Corp’s Rupert Murdoch and Disney’s Bob Iger are not convinced that allowing Hulu unrestrained growth as an ad supported and subscription based service is a good idea. They fear that it will erode the customer base for their massive cable businesses.

So far there’s no word on who, if anyone, has truly bid for Hulu. There’s been no further word on the one “unsolicited bid” that we reported on last week.

And a knowledgeable source tells me he does not believe Yahoo has made a bid for the company, as the L.A. Times has reported. Instead the belief is that Yahoo has expressed interest in making a bid, a far cry from an actual cash offer.

But it’s not clear that Yahoo really has the kind of cash that would allow it to pay some multiple of $500 million in revenue for Hulu, which is what the company is estimated to reach by the end of 2011.

Who does that leave? A webby strategic investor, says the smart money. There’s Google, swimming in oceans of cash, that might want to. There’s Amazon. Apple, naturally.

It doesn’t feel like Sony or Viacom, the two other major content companies, have the ambition to ingest and grow Hulu. Time-Warner? It could. Does CEO Jeff Bewkes have that vision? After all, Warner’s just bought Flixster, albeit for a small fraction of what it would take to buy Hulu.

Hard to say. And Hulu isn’t commenting at all on its being in play.

But people close to Kilar say he is entirely frustrated, and understandably so. After all, he has built this incredible company in four short years, from a standing start to some half-billion in business, spending some $300 million this year alone to buy content.

The thanks he gets? The right to say nothing while his company is sold from underneath him.  

Kilar’s owners, the content companies, have tired of this game and they are calling it quits. Kilar, based in Santa Monica, had best get cozy with the Silicon Valley crowd.