Yahoo Wants Hulu to Take Down the Netflix and YouTube Empires

If you can't beat 'em, buy 'em. If you can't buy 'em, acquire one of their competitors and hope for the best.

That has been the strategy of

, which has been on the lookout for a

ever since

acquired the real YouTube and turned it into the world's largest streaming video site. Yahoo tried

to acquire YouTube's little brother, AKA Dailymotion. The French-owned video site is one of the largest of its kind, especially in Europe, gaining

. It is estimated to be worth $300 million. The M&A talks came to a screeching halt after a French government official told Yahoo that he did not want an American company to own a controlling stake in one of France's most successful startups. Yahoo could still buy 50 percent of Dailymotion, but that offer was reportedly less appealing. Now Yahoo has gone back to Hulu, a company it

at least once before. According to

, "numerous sources close to the situation" have confirmed that Marissa Mayer, Yahoo's CEO, has met with Hulu's top executives to discuss a potential offer. No formal offer has been made, however. For the time being it seems that Mayer is simply interested in examining Hulu. Compared to

, she may be disappointed by the fact that Hulu only has

. That number is up from three million last year, however, and is just one of two key ways that Hulu can make money. Unlike Netflix and

, whose users have said that they

, Hulu users are willing to put up with the one or two ads that air during each break. Non-paying customers are also exposed to ads, so Hulu could feasibly turn a profit without a single subscriber. It is also worth noting that Hulu is only available in the United States and Japan. The site could grow exponentially as it expands to new markets. Will that be enough to persuade Mayer? Not necessarily. In the end, Hulu's owners --

,

and

-- may decide to hold onto the company regardless of how much Yahoo is willing to pay. Considering that those companies -- particularly Disney's TV network, ABC -- currently provide a significant portion of the site's most popular shows, it might be wise for them to second guess their urge to sell Hulu. News Corp.'s Fox and Comcast's NBC built Hulu from the ground up to change online video. Why walk away before it has had the chance to fulfill that goal?