Pairing Google with Hulu gives studios a strong alternative to Netflix

Jim O'Neil

editor's corner

Will Google (NASDAQ:GOOG) really be the last one standing in the battle for Hulu? There currently are as many as 10 possible buyers reportedly talking with the company, including Yahoo, Microsoft (NASDAQ:MSFT), Amazon, AT&T (NYSE:T), Netflix (NASDAQ:NFLX) and Verizon (NYSE:VZ).

And, if Google does close a deal, does it matter?

The answer to the first question is a definite "maybe."

To the second, a resounding "yes," for Google, Hulu and for Hollywood.

First Google has to convince a Hollywood establishment, one that it so far hasn't been able to crack, that Google is the right place to be.

Google last year made an effort to allay Hollywood's fears that it was the equivalent of a black hole for content when it bought content security specialist Widevine. It cleaned up YouTube's interface, bought a company (Next New Network) that could help it load up better quality, professionally produced content, and bought another company (Green Parrot Pictures) that builds cutting-edge video quality improvement technology, which helps make videos look better while using less bandwidth and improving playback speed.

It even got the backing of three studios to help it expand its video-on-demand offerings.

But that still doesn't mean Hollywood can see Google as a partner, and that nervousness remains a hurdle.

But Hollywood's increasing concern over Netflix, which continues to roll forward, may play in Google's favor. Of all the companies potentially in the race, the marriage between Google and Hulu is one that gives the studios a chance to create some balance.

It puts Google into the major league in terms of content, gives Google TV a new life and, as Barclays analyst Anthony DiClemente wrote in a research note Tuesday, offers support for Google's advertising business.

"The combination of YouTube's user-generated content and Hulu's professional content could deliver strong synergies for the company and better position it to capture a greater share of the online video and branded advertising market," he wrote.

Is there a better partner for Hulu? Let me know what you think.--Jim

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