According to sources for Variety and The Wall Street Journal, YouTube (and to a larger extent Google) are in talks about buying out Twitch for one billion (yes, billion) dollars, which would be the largest acquisition in YouTube’s history.
Twitch, a San-Francisco based start up that launched in 2011, is a service that allows user to freely upload and view livestreams, most notably with video games. This has quickly helped Twitch become the de facto streaming site for gaming, with them claiming to have roughly 45 million monthly viewers and over 1 million users uploading videos per month. As an example of the rising popularity of Twitch, Qwilt, an online video and networking firm, reported that Twitch accounted for 44% of all live streaming traffic in the US during the week of April 7. Twitch alone was also responsible for 1.35% of all downstream bandwidth for North American based broadband networks during the month of March.
All of these have made Twitch an attractive platform for advertisers and for companies like YouTube, which have lagged behind in regards to streaming content. As Mark Fisher, VP of business development for Qwilt, pointed out “YouTube doesn’t have engagement and engagement is what drives advertising.” According to Variety, YouTube is prepared for US regulators to investigate and challenge the deal. This is due to YouTube being far and away the number one platform for watching Internet video and Twitch emerging as a powerhouse in regards to streaming gaming content, which raises issues of anti-competitiveness.
However, one aspect that Variety and WSJ do not agree on is how close Twitch and YouTube are to a deal. Variety reports that the deal is expected to be announced “imminently” while the WSJ reports that “the talks are at an early stage, and a deal isn’t imminent”. The WSJ also couldn’t confirm if the deal was around $1 billion dollars.
When asked, Twitch and YouTube reps declined to comment, even going so far as to say so through Twitter.
For those asking about the story today, Twitch doesn't comment on rumors.
— Chase (@ChasejustChase) May 18, 2014
