Yahoo Should Buy Hulu

Excerpted from GigaOM:

New Yahoo CEO Carol Bartz is a solid, proven manager who will bring some much-needed stability to the beleaguered Internet giant, but she has a big hole in the No. 2 spot. Bartz needs a president who is young and energetic, has engineering chops, clear vision, and — most importantly — expertise building great products that provide a compelling Internet user experience for a diverse group of consumers.

My candidate to be her consigliere: Jason Kilar, CEO of Hulu. I’ve spoke to quite a few people who know Kilar well, and most of them described him as that rare content guy with technical chops. A good team builder, he is said to inspire. Others waxed eloquent about his sense of design and his passion for media. Remember, he ran the DVD store for Amazon. His defining quality is hyper-competitiveness — something that would be important to fire up the troops.

With his service growing by leaps and bounds, and advertisers lining up to get on board, Kilar’s only problem is that he doesn’t have enough traffic –- like, say, YouTube. This is where Yahoo can help. Or rather, where the two can help each other. Clearly search and search advertising isn’t quite working out for Yahoo; what Yahoo knows best is media and content. Which is why buying Hulu would be a strategically relevant acquisition for the company — it would play to Yahoo’s media strengths.

You’re probably thinking, why would Fox (s nws) and GE (s ge) sell their pet project to Yahoo? Well, why not? After all, they took a $100 million investment from Providence Equity Partners, which means they have an interest in making some sort of a return on this company. By selling to Yahoo for stock -– say, $2 billion worth — Rupert Murdoch would get a nice big chunk of Yahoo shares, which could come in handy if he wants to offload MySpace to Yahoo sometime in the future. NBC would get a significant Internet presence with Yahoo, which could only help its other digital efforts. And the Providence guys –- well, they’d get to make some money.

Read the full post on GigaOM.