×
You will be redirected back to your article in seconds

Google Seals Deal to Buy Twitch for $1 Billion: Report

Google has finally clinched a deal to buy videogame-broadcasting company Twitch for $1 billion, VentureBeat reported, citing anonymous sources.

Variety first reported in May that Google had reached a preliminary pact to acquire Twitch for $1 billion in cash, in order to augment its YouTube video site.

Reps for Twitch and Google declined to comment.

SEE ALSO: Why Google Wants to Hitch Twitch and YouTube

Twitch was created by the founders of Justin.tv, a website designed for users to “lifecast” themselves with online video. After a growing number of videogamers began using Justin.tv to broadcast their gameplay, the company launched the dedicated Twitch.tv service in mid-2011.

Privately held Twitch has raised about $35 million in funding — meaning the $1 billion deal is a significant windfall for its backers. Investors include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates. Twitch Interactive, which includes Justin.tv, has about 130 employees.

San Francisco-based Twitch says it has more than 45 million monthly users, who watch an average of 106 minutes of video daily. Users can upload and watch free, live gameplay videos from Microsoft Xbox One and Sony PlayStation 4 consoles. Twitch generates revenue through ads and as well as subscriptions, with about 300,000 paying members.

With Twitch, YouTube could extend live-streaming to other categories, including with multichannel network partners like Disney’s Maker Studios and Machinima, which focuses heavily on the male-oriented videogame segment. YouTube’s own efforts to intro live broadcasting have had limited success to date.

Google and YouTube also want Twitch because it has established a proven model for subscription-based video. A year ago, YouTube launched a paid-channel initiative with 30 partners, including The Jim Henson Co., NatGeo Kids, Nelvana Enterprises and DHX Media. But to date, the pay channels have seen very little traction. Meanwhile, the Internet-video leader — which generates a large amount of traffic from music videos — expects to launch a paid music service in the next few months.

One potential issue with Google’s Twitch deal is that regulators may challenge the transaction if they believe the combination of the No. 1 online-video platform (YouTube) and the No. 1 live-streaming Internet service (Twitch) raises anticompetitive issues. Google’s lawyers have been preparing for such an objection, sources said.

In March 2014, Twitch represented 1.35% of all downstream bandwidth on North American fixed-access broadband networks during primetime hours, nearly triple from last fall, according to bandwidth-equipment company Sandvine. YouTube’s share of downstream bandwidth was 13.2%, while Netflix remained the biggest consumer of traffic with 34.2%.

More Digital

  • Vaccination

    YouTube Yanks Ads From Anti-Vaccination Conspiracy Channels

    YouTube, under fire for facilitating the spread of conspiracy theories and other misinformation, said it will no longer serve ads on channels that espouse anti-vaccination rhetoric. The Google-owned video giant cited its advertising policy that bans “dangerous and harmful” content from eligibility in its monetization program. “We have strict policies that govern what videos we [...]

  • Evan Williams, Twitter founder (R) and

    Twitter Co-Founder Evan Williams Steps Down From Company’s Board

    Twitter co-founder Evan “Ev” Williams is stepping down from the company’s board, Twitter announced in a SEC filing Friday afternoon. Williams will depart from the board at the end of this month, according to the filing. “It’s been an incredible 13 years, and I’m proud of what Twitter has accomplished during my time with the [...]

  • Facebook Logo

    Facebook Shuts Down Controversial Ovano VPN App

    Responding to a continued backlash over its data collection practices, Facebook pulled the plug on its Ovano VPN app Friday. Ovano, which promised users an added level of privacy while using public Wifi hotspots, was used by Facebook for market research purposes. Facebook removed the app from the Google Play store Friday, and the company [...]

  • Smosh

    Smosh Acquired by Rhett & Link's Mythical Entertainment

    UPDATED: Smosh, the long-running YouTube comedy brand, has been acquired by Mythical Entertainment, the company formed by Rhett & Link, hosts of comedy show “Good Mythical Morning.” As first reported by Variety last week, Mythical emerged as the leading candidate to buy Smosh, which was left stranded after parent company Defy Media shut down without [...]

  • China Video Streaming Giant iQIYI Loses

    Chinese Video Giant iQIYI Loses $1.3 Billion in 2018

    Chinese video streaming firm iQIYI lost over $1.3 billion in 2018, as revenues and subscriber numbers ballooned. The deepening losses reflected ever higher spending on original content production. Announcing its first full-year financials since a March IPO that launched it onto the NASDAQ, iQIYI said that it lost $1.3 billion (RMB9.1 billion) last compared with [...]

  • Roku headquarters

    Roku Aims to Top $1 Billion in Revenue in 2019, Beats Holiday Quarter Earnings Expectations

    Roku wants to become a billion-dollar company in 2019, and invest more in its ongoing international expansion. The streaming-device maker told investors on Thursday that it expects to generate between $1 billion and $1.025 billion this year, and that international growth was one of its key investment areas for 2019. Roku made these announcements as [...]

More From Our Brands

Access exclusive content