Unnamed sources told Variety on Monday that Google’s YouTube plans to acquire game video streaming company Twitch for more than $1 billion USD in cold hard cash. By comparison, Google paid $1.65 billion for YouTube back in 2006.
According to the sources, YouTube is currently getting ready to face challenges from U.S. regulators over the possible Twitch deal. The Justice Department will likely want to investigate to see if the acquisition will raise anti-competition issues within the online video streaming market.
Meanwhile, two additional sources told The Wall Street Journal that the deal is actually in an early stage, and is not finalizing anytime soon. One of those sources also said that Twitch sought out additional avenues of funding rather than an outright sale of Twitch.
Another set of sources told The Verge that Twitch actually evaluated offers from potential buyers, such as Microsoft. The company even courted funding offers from venture capitalists. However Twitch decided it liked the Google offer best, and believes YouTube can help Twitch become the leader in live video game streaming.
Founded by Justin Kan and Emmett Shear in June 2011 as a subsidiary of Justin.tv, Twitch is a live streaming video platform that mainly focuses on general video gaming and e-sports. During its peak hours, Twitch falls in behind Netflix, Google and Apple as the fourth largest source of Internet traffic. There are over 43 million viewers each month, and over 1 million broadcasters.
Twitch originally launched on the PC, but now there are apps on the Xbox One and PlayStation 4 that allow owners to stream console gameplay directly to the site. Sources say that Google and Twitch have agreed on a price, and are now hammering out the details, including how separate the Twitch service and branding will be from the Google collective, if at all.