Disney Takes Stake in Hulu Online-Video Site

Disney movies and ABC TV shows will be available on Hulu.com now that Walt Disney Co. is taking an equity stake in the popular video streaming site, joining its founders, NBC Universal and News Corp.

The deal announced Thursday will bring older Disney movies to the site, along with ABC and Disney Channel shows such as "Lost," "Grey's Anatomy" and "Wizards of Waverly Place" after they run on TV.

Disney hopes to gain new viewers that it does not already capture on ABC.com and pick up new income from sharing ad revenue on Hulu.

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The biggest contribution from Disney will be its content, but it will also make a cash investment similar to the amount that General Electric Co.'s NBC Universal and News Corp.'s Fox each contributed in March 2007, according to people knowledgeable about the deal, who spoke on condition of anonymity because the terms were confidential.

It is unclear how much Disney paid, but Disney, News Corp. and NBC will all have similar-sized stakes.

Disney Chief Executive Robert Iger, Disney/ABC Television Group President Anne Sweeney and Kevin Mayer, a Disney senior vice president, will join Hulu's board. Fox and NBC also have three representatives on the 12-member board.

Disney's money will fund advertising for Hulu on Disney properties, said one of the people with knowledge of the deal. Fox's and NBC's investments went for similar purposes.

During the Super Bowl in February on NBC, Hulu paid for an alien-inspired ad starring Alec Baldwin.

In October 2007, Providence Equity Partners invested $100 million for a partial stake that valued Hulu.com at $1 billion. Hulu employees also own an equity stake. Hulu's latest valuation after Disney's investment is unclear.

This deal comes after one in March in which Disney announced it would provide short-form ESPN and ABC content to Google Inc.'s YouTube under an ad-revenue sharing arrangement. ESPN content is not part of the Hulu arrangement, which was focused on full-length content.

Disney shares rose $1.37, or 6.5 percent, to $22.38 after the announcement. GE shares rose 39 cents, or 3.2 percent, to $12.61, while News Corp. shares rose 30 cents, or 3.3 percent, to $9.29.

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