Following the numbers in that article here: Say they're break-even on $70mm of annual revenue. 35% of annual revenue is gross profit - so of $70mm they keep $

Following the numbers in that article here: Say they're break-even on $70mm of annual revenue. 35% of annual revenue is gross profit - so of $70mm they keep $24.5mm - so say that's their operating expense number. I think you'd have to expect a 3-5x bump in revenue (assuming gross margin stays the same and no significant growth in that operating expense number of $25mm) to justify buying at a $2bn valuation. 4x revenue growth from $250mm expected this year = $1bn revenue $1bn revenue * 35% gross profit margin = $350mm gross profit. $350mm - $25mm operating expenses = $325mm pre-tax income. $325mm less 35% taxes = $210mm net income. Assuming they can keep up a steady growth rate at this point and you can value Hulu at 15x their net income number, this implies a value of $3,150. Which is about a 15% annualized return number over 3 years off a valuation of $2bn today. So some of the questions are - how much do you expect online TV to grow, what percent of that market do you think Hulu will have, and successful do you think Hulu Plus and any other initiatives will be, and do you think Hulu can keep their operating expenses relatively flat?