[rottendoubt]

If I were Google, I would have done it. Offered $2B and taken the 2-year deal with Hulu. Match it up with YouTube, grow it as big as possible, and completely dominate online video to the point of creating a monopoly. At that point, you'd have leverage to negotiate with the studios -- yes they have the content, but you'd have the distribution (think iTunes and record labels). If they don't deal with you and try to launch something separate, they'd have no traffic. And there'd be no real competition on bidding from third parties as they'd likely already have been wiped out by the YouTube/Hulu combo.