Joseph O'Halloran ©RapidTVNews | 20-07-2011

Microsoft is said to have pulled out of the ongoing auction to bid for the Hulu over the top (OTT) online video service.

According to reports in financial news outlet Bloomberg, the IT giant has informed Hulu executives that it would not progress into a round of bidding in a process that reportedly also includes Google, Yahoo!, AT&T and even Amazon.

The sale rumours first began on 3 July for the online video service which is co-owned by News Corp, Disney and Comcast-NBCUniversal, but which has to date failed to generate revenues that the partners expected. After launching first as a free to watch ad-funded service, nearly a year ago Hulu introduced its Hulu Plus premium subscription service last fall, with most in-demand content moved behind the pay wall.

In 2011 year Hulu expects to make around $500 million on the back of 1 million subscriptions, but now, in the era of TV Everywhere, most content companies seem to be looking to cable TV, satellite TV and IPTV to help them leverage the multi-screen opportunity. However Disney and News Corp recently added more content to Hulu to make it a more attractive proposition and, reported Bloomberg, Hulu plans to offer bidders five years of access to shows from its media-company owners, including two years of exclusivity. Some analysts say the OTT firm could sell for as much as $2 billion.

In a blog post on 6 July, Hulu predicted that it would have 1 million subscribers paying $7.99 a month by the end of August 2011.