whoever buys Hulu is going to regret when they find out all the content deals goes up in smoke when the company change hands.
The whole point of Hulu was to stop piracy and return any cash generated to the content providers, not to be a profitable ongoing business. I don't even know what it means to buy a company that must funnel all revenues to content providers. It seems like Yahoo is bidding on something they won't actually control.
And a viable competitor to YouTube's new paid subscription service. UGC was the big thing in video since YouTube launched, but the real revenue generator could be paid subscriptions, and that market is wide-open. Hulu doesn't -have- to be big studios.
And yahoo is a company with alot of add inventory!
Still, you can imagine a scenario where Yahoo signs an ad deal with say General Motors for an overall package for all their properties, and then throws in Hulu as a bonus.
Keep the ad rates at Hulu at whatever minimum is written into the content deals, but use that as a bonus/loss leader for the real money that's allocated to advertising on the other Yahoo properties.
Might work.
So while what you said may be true in general, it seems especially likely in this case.
This would be the first thing anyone acquiring Hulu would look at.