A few weeks ago we reported that Microsoft was in serious talks with Hulu to purchase the company, which was put up for sale by it's parent media company owners.
Of course we were supportive of such a proposed purchase since it would guarantee more exclusive integration with PC, Xbox and Windows Phone, the latter of which has yet to see a native client. With the purchase of Skype under their belt, bringing Hulu into the fold would have been a great leg up on the competition.
However, according to Bloomberg, Microsoft has now dropped out of contention for the streaming TV site. No reason was given, though usually it has to do with perceived cost vs value. Yahoo!, ironically is reportedly ready to fork over $2 billion for the company, though it is expected that negotiations will continue for the next few weeks. Reportedly Microsoft has also not ruled out stepping back into talks later if terms become more favorable.
Microsoft has yet to publicly confirm the story, so it remains to be seen how this progresses, but as of right now it's not looking to good for our side.