Rumor: Google YouTube Division May Be Acquiring Twitch

By Kevin Parrish
published

Unnamed sources told VentureBeat on Thursday that Google has signed a deal to acquire the popular live-streaming company Twitch for $1 billion. Google’s YouTube division, which was acquired by the search engine giant back in 2006 for $1.65 billion, is handling the actual acquisition.

Rumors of a possible acquisition surfaced back in May. Sources told Variety that YouTube offered an all-cash deal to Twitch, and that both parties reached a preliminary agreement. At the time, the report stated that YouTube was getting ready for the Justice Department to take a long hard look at the deal and determine if it would raise antitrust issues.

Justin Kan and Emmett Shear, co-founders of Justin.tv, launched Twitch back in June 2011. The San Francisco startup allows users to provide live gameplay footage that is streamed from the PC, Xbox One and PlayStation 4. Twitch is also popular in the e-sports market, where it is used to stream coverage from live professional gaming competitions.

The company, which is run by CEO Emmett Shear, sells a $9 monthly ad-free subscription as well as $5 monthly subscription to a single channel. More than 45 million people use the site each month, and more than 1 million subscribers broadcast videos each month. During its peak periods, Twitch accounts for 1.8 percent of North American Internet traffic.

Variety reports that YouTube wants Twitch because the latter company has established a proven model of subscription-based video. YouTube launched its own paywalls back in 2013, offering “channels” from 30 providers, but according to the report, the pay channels have seen very little traffic. The average Twitch viewer watches an hour and a half of gaming each day.

Twitch generates its revenue through ads, and by way of subscriptions, which currently is around 300,000. Since its launch, Twitch has also raised around $35 million in funding from Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates. Twitch employs around 130 people.

Unfortunately, both Google and Twitch have declined to comment on the alleged deal. However, we’ll likely hear more about the acquisition within the next few weeks.

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Kevin Parrish
12 Comments Comment from the forums
  • surphninja
    The real reason is to force Twitch users to sign up for Google+.
    Reply
  • ubercake
    Step 1 - Become a giant tech company.
    Step 2 - Buy up the competition.
    Reply
  • kawininjazx
    All the big time gamers on YouTube are getting more heavy into Twitch and most are stated they would not be happy if YouTube took over Twich.
    Reply
  • thundervore
    Cant wait for them to turn it into Youtube where you cannot post a comment unless you have a Google+ account.

    Now it going to be cannot join stream.
    Reply
  • joaompp
    I think they might integrate a Google account in there somewhere, but for some reason I think they're doing this to help build up their upcoming android TV platform, so as to add live streaming content. I'm hoping they expand the service to extend beyond gaming and to incorporate other live feeds.

    Imagine, cooking or teaching on twitch, while being able to answer questions in real time.
    Reply
  • ubercake
    13800290 said:
    Cant wait for them to turn it into Youtube where you cannot post a comment unless you have a Google+ account.

    Now it going to be cannot join stream.

    And they are going to be tracking you and selling your data all the while.
    Reply
  • icraft
    :(
    Reply
  • Bean007
    Only good things for Google will be all that money will be in One Big Family.

    Only Good thing for Streamers will probably better network.

    Many bad things for Watchers & some for Streamers. One might be playing Copyrighted Music. And yes the Google+ thing.
    Reply
  • SessouXFX
    Nothing left to really say here. It's pretty bad when so many can see right through the scheme that Google is already cooking up...the whole deal has a stench to it.
    Reply
  • thor220
    The only good things that can come of this is that it will give google even more bargaining power with ISPs. It will be hard for comcast/verizon to limit speeds to google services when they pretty much do all the streaming on the internet.
    Reply