Wednesday, April 1, 2009, 9:02 AM ET|Posted by Will Richmond
In a surprising turn-of-events, VideoNuze has learned that Google will acquire Hulu and merge it with YouTube. The resulting entity will be named either 'YouLu' or 'HuTube.' The merger brings together the two most-trafficked video sites into a powerful new player.
In an interesting twist, the final acquisition price has not yet been determined. Instead, the price will be based on a new algorithm Google is creating to accurately measure just how effective Hulu is at turning its users' brains into 'creamy giggity-goo' as Seth MacFarlane asserts it will in the latest of Hulu's alien-inspired ads. The algorithm will actually be able to count how many more of users' brain cells die as a result of watching shows on Hulu beyond the cells that already died due to regular on-air network TV viewership.
It turns out that Hulu's positioning as an 'evil plot to destroy the world' was considered highly synergistic with Google's longstanding mantra to 'do no evil.' Google CEO Eric Schmidt revealed that the company decided some time ago to move beyond its good-guy image, saying, "Look, we got a lot of mileage out of that 'doing no evil' malarkey, but it's time to get real. We're an avaricious multi-billion company now, and all these wacky tree-hugging green initiatives our engineers keep dreaming up can't hide that." He added, "We really admire the traction Hulu is getting by turning 'evil' into a virtue and want to tap into that concept further. Those Hollywood guys beat us hands-down when it comes to creativity."
For its part, Hulu's owners' decision to merge with YouTube, for a price not yet quantifiable, can only be seen as waiving the white flag of surrender. In an email exchange between Jeff Zucker, NBCU's CEO and Peter Chernin, Fox's former CEO (who made the original Hulu deal), obtained by VideoNuze, Zucker's frustration with Hulu's distant second place status is palpable. Among other things he says, "I thought we had dumbed down our shows as much as possible, but YouTube has clearly tapped into audiences' insatiable appetite for the inane. Who would have thought that skateboard-riding cats crashing into walls would have more audience appeal than our $2 million/episode scripted dramas. There really is no accounting for taste."
In response Chernin is quoted as saying, "Rupert always thought Hulu was a small potatoes deal, not really capable of losing a large, exciting amount of money. On the other hand, YouTube has been a gigantic black hole for Google, so the opportunity to join forces and achieve scale at losing money together was just incredibly compelling." He added, "Plus, you have to remember, Rupert's heart is really in newspapers. He continues to think this whole Internet thing is a fad that will eventually blow over, with people returning to newspapers as their trusted source of news and propaganda. So the company is logically positioning itself to have sizable video losses to offset expected massive gains in newspaper profitability."
Meanwhile, in a meeting with employees, Hulu CEO Jason Kilar reportedly sought to put a positive spin on the merger. Employees who have Twittered the meeting say that to pump up employee enthusiasm he re-told stories of how much fun it was to originally come up with the name 'Hulu,' reportedly saying, "Look how much mileage we got of one ridiculous-sounding made-up name, just imagine the branding possibilities of the even more-ridiculous sounding names YouLu or HuTube..." Negotiations are already underway with the Chinese portal and domain parking company that own the respective URLs.
The merger left many industry analysts scratching their heads. Representative of their reaction, VideoNuze's Will Richmond said, "Geez, I never thought we'd see a more nonsensical media merger than the one between Time Warner and AOL, but I think this YouLu/HuTube thing might just be it. Let's hope it's not for real, and is just some kind of April Fool's Day joke cooked up by an industry analyst to provide some once-per-year, cheap laughs."