Will These Departures Weaken Hulu?

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Senior executives at Hulu are dropping like flies as Disney (NYSE:DIS) and News Corp. (NASDAQ:NWSA) weigh offers for the company. Hulu’s international chief is among the most recent to quit.

Currently, Hulu is owned by Disney, News Corp., and Comcast (NASDAQ:CMCSA). Each company has about a one-third share of the company. However, Comcast had to give up its right to make operational decisions or to have a role on the board. This was part of a regulatory deal that allowed Comcast to purchase NBC Universal.

Recently, Hulu has been on the up and up. In 2012, it’s revenue jumped up to $695 million — an increase of 65 percent from 2011. According to the company, it has 4 million subscribers to its $8-a-month service. Despite standing a long way behind Netflix, which has 36.3 million subscribers worldwide, several companies have made offers to buy up Hulu from its current owners.

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Yahoo! Inc (NASDAQ:YHOO) is probably the most well-known company said to be pursuing Hulu. Yahoo already has a robust and widely used video service, but Hulu could give it more content, more subscribers, and more ways to monetize. Earlier, Yahoo tried to purchase Dailymotion, another Internet video service, but that move was blocked by regulators.

It’s uncertain just what role Yahoo is interested in with Hulu. A complete buyout would give the company the most control over Hulu, but Yahoo would have a hard time sealing content deals with Disney, Comcast, and News Corp., which are a key ingredient to the success of Hulu. It’s possible that Yahoo would instead try to buy into the company. As Disney and News Corp. have differing opinions on where the company should go, it’s possible that one of them will buy the other out, which could leave an opening for Yahoo to join in.

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