Disney, YouTube Live Happily Ever After

The Walt Disney Company (DIS) and Google (GOOG) are discussing a deal that would secure programming for YouTube and shut out rival Hulu.

The deal would give Disney greater distribution for clips from ESPN, ABC and other content as increasing numbers of users go online for news and entertainment. The deal would give Google professionally produced content to supplement the steady diet of homemade, goofball clips that are now posted on YouTube.

PaidContent.org says Disney and Google are close to reaching an agreement. Neither company has made an official announcement.

Disney and Google would share revenue derived from the deal, but Disney would control most of the ad inventory. However, Google would be able to sell some advertisements. YouTube would link Disney websites.

Google purchased YouTube in 2006 for about $1.6 billion. Hulu, which appears to be odd-man out, is a joint venture of NBC Universal (GE), and News Corp. (NWS).

The deal would give Disney an immediate source of new revenue. Hulu is growing rapidly, but still trails YouTube. It’s unlikely that either video service is profitable.

Where’s Yahoo (YHOO) in all this?

Google leads in search ads and its rumored deal with Disney suggests Yahoo might want to take a second look at an alliance with Microsoft (MSFT) - and hurry up about it.



In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.