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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

June 14, 2012 at 1:44 PM

Source: Nope, Microsoft’s not buying Hulu

I made a crazy guess about what Microsoft’s going to announce at its surprise press event Monday in Los Angeles, but I guess it was a little too crazy.

I speculated that Microsoft might announce a big deal with streaming video provider Hulu.

But a source familiar with the situation just told me that’s not happening. Apologies for building any false hopes.

My speculation was based on recent moves that Microsoft’s made, ahead of the Windows 8 launch.

I still think it needs to bulk up its video application and service for Windows tablets, phones and the Xbox. Bringing Hulu into the fold would be a quick way to make this happen, beyond the video apps the Xbox group has lined up.

It would also do more for the consumer appeal of Windows tablets than adding the Yammer enterprise collaboration and message network, which is what some other news outlets are predicting will be announced on Monday.

Here’s what I was thinking:

Hulu_Video_Player_Page.jpg

Hulu’s huge library of TV shows and movies would add value to the Xbox Live paid subscription service, which is increasingly turning into a video delivery platform.

Hulu also has a system for delivering TV shows and movies free, funded by advertising. Many of the Hulu engineers who developed this technology previously worked at Microsoft and the company’s chief executive, Jason Kilar, is an Amazon.com veteran who still spends time in Seattle.

Microsoft has been signing up all sorts of video content providers to offer their apps on its platform, including Hulu Plus. The company also has been increasing video rentals and sales through the Zune marketplace, which serves as the official Xbox video store.

But the company’s video service needs a boost, especially to compete with the free content that Amazon.com is providing to Kindle Fire users and others who subscribe to its Prime service.

Music and video are two of the key apps that Microsoft will bundle with tablets running the RT version of Windows 8 coming this fall. The company previewed the music app last week at the E3 conference, saying it will be an improved version of the Zune service with 30 million tracks.

The company also made a deal in April with Barnes & Noble to ensure Windows devices have a premium reading app and service.

But there’s been no word yet on if and how the company will upgrade the video app and service, which will also support the company’s phones, consoles and PC operating system.

Hulu’s owners tried to sell the company last year but couldn’t line up a buyer and took it off the market late last year. Some speculated it would fetch $500 million to $2 billion.

Hulu’s owners include Microsoft’s closest partners in the media business. News Corp. has long worked with the Redmond company to get its programming onto the Xbox and Windows Media Center.

NBC is Microsoft’s partner in MSNBC.com, which may be in play. Reports last month said NBC is looking to buy out Microsoft’s stake in the joint venture.

This sort of deal wouldn’t just help Windows and Xbox. Imagine what the addition of Hulu could do for Bing, which already has a selection of TV shows streaming under its “video” section.

Los Angeles seemed like a clue. That’s where Hulu is based, and Microsoft’s gone there in the past to announce its big multimedia initiatives.

Microsoft’s top spokesman, Frank Shaw, wouldn’t confirm or deny it, or even discuss the possibility prior to Monday’s announcement.

“We’re not talking about anything,” he said.

A Hulu spokeswoman declined to comment, saying it never comments on other companies’ announcements.

I guess I’ll sit tight until Monday.

Comments | Topics: Digital media, Digital TV, hulu

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