Apple to Buy Hulu? [REPORT]

Apple could be considering a purchase of popular online video service Hulu, according to “two people who weren’t authorized to speak publicly.”

The two sources spoke with Bloomberg, calling the negotiations “early talks that may lead to an offer for Hulu.”

The Hulu rumor mill was already heating up over the past few days — we reported about a bidding war for Hulu, which is shopping itself around to potential acquirers after deciding not to go through with a $2 billion IPO.

Sweetening the deal is a promise of five years of programming for Hulu’s highest bidder, including two years of exclusivity for the programming on Hulu, consisting of content from the Walt Disney Company, News Corp. and Comcast’s NBC Universal.

While Microsoft is reportedly not interested in a second round of bidding for the online video company, Yahoo is still in play. Business Insider reported on Tuesday that the price for the premium online service could reach $2 billion.

Yahoo’s Q2 Revenues Fall As Display Ad Business Suffers

 by Todd Wasserman

Yahoo’s earnings and revenues fell in the second quarter as various factors — including a deal with Microsoft and executive shuffles — weighed on results.

Revenues for the quarter were $1.08 billion, a 5% drop from the comparable quarter in 2010. The figure was below analysts’ estimate of $1.11 billion. In a statement, Yahoo blamed the shortfall on a search- and revenue-sharing agreement with Microsoft. The companyinked a 10-year deal with Microsoft in 2009 in which the latter’s Bing will be the search engine for all Yahoo sites. Meanwhile, net earnings for the quarter were up 11%, to $237 million.

Though display advertising is booming this year, Yahoo’s share of the business isn’t keeping pace with rivals like Facebook and Google. In Yahoo’s statement, CEO Carol Bartz (pictured) blamed the softness on “comprehensive changes we have made in our sales organization to position ourselves for more rapid display growth in the future.”

Yahoo’s earnings stand in marked contrast to those of Google’s, which posted revenues of $9 billion in its second quarter, a 32% jump over Q2 2010, and a net income of $2.5 billion, compared to $1.84 billion for the same period in 2010. Researcher IDC reported in May that Google, which surpassed Yahoo in search ad revenues years ago, now sells more display ads as well.