![YouTube acquires Twitch for more than $1 billion [Update]](https://d1lss44hh2trtw.cloudfront.net/resize?type=webp&url=0&width=1032&sign=hjPf1YK82dV-QT8oL3v_lLzC62zix4hvLjTqBJFhHgY "YouTube acquires Twitch for more than $1 billion [Update]")
YouTube acquires Twitch for more than $1 billion [Update]
YouTube has reached a deal to acquire video game streaming company Twitch. The deal is reportedly for more than $1 billion, all in cash. The deal would be the largest in YouTube's history.
Update: Twitch PR Director Chase has responded to a Shacknews inquiry, replying, "We don't comment on rumors."
Furthermore, the deal isn't entirely a sure thing, according to the Wall Street Journal. Twitch is currently exploring other revenue options that do not include selling the company.
Original story: YouTube has reportedly reached a deal to acquire video game streaming company Twitch, according to sources. The deal is for more than $1 billion, all in cash. The deal is said to be the largest in YouTube's history.
The story comes courtesy of Variety. Both YouTube and Twitch have declined comment thus far.
The transition may not be a smooth one, according to sources within YouTube. The company fully expects for the purchase to be challenged by the U.S. Justice Department on antitrust grounds.
The San Francisco-based Twitch Interactive originally launched in 2011 as an official gaming branch of Justin.tv, which was originally founded by Justin Kan, Emmett Shear, Michael Seibel, and Kyle Vogt. The site has raised about $35 million from several investors. The service's popularity has been such that Twitch-centered features have become a staple for PlayStation 4 and Xbox One.
The deal would be a lucrative one for Twitch, but one that may make current users take pause. The Google-owned YouTube has made headlines in recent months for their harsh copyright stances, with some publishers (Nintendo, among them) notoriously flagging numerous videos containing copyrighted gaming content and claiming all monetization rights. YouTube has compounded the problem by making the appeals process extremely unfriendly to those accused of infringement.
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Shacknews
replyOzzie Mejia posted a new article, YouTube acquires Twitch for more than $1 billion.
YouTube has reached a deal to acquire video game streaming company Twitch. The deal is reportedly for more than $1 billion, all in cash. The deal would be the largest in YouTube's history.-
Makes since I guess, most of the content providers work both platforms.
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Update: Twitch PR Director Chase replied to me with "We don't comment on rumors."
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Very huge, but Variety isn't the type of publication that would just spitball some rumor or speculation if there wasn't something to it.
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That's the 1 Billion Dollar Question, isn't it?
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Depends. Are you running a monetized Twitch channel?
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Google+ integration incoming, FINALLY!
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Can't wait to see how they fuck this up. I'm assuming they'll immediately get rid of the purple and replace it with white, off white, nearly white, arctic white, and cream.
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1 billion for Twitch? Not being sarcastic, but that seems pretty tiny when you consider whatsapp for $19 billion and oculus rift for $2 billion. Twitch deserves more!
Most importantly though, I really really really really hope Google doesn't fuck twitch.tv. It's an awesome gaming site and they better keep Google+ the fuck away from it.-
Ben Kuchera pointed out that YT paid half as much for Twitch as Facebook paid for Oculus.
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Would be cool if they just automated the whole thing. If you stream copyrighted music, then a portion of your revenue goes to the owners of the music. Not sure how they'd work out all the details with record companies though, since they tend to be very conservative and slow moving when it comes to new technology and possible new revenue streams.
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I really don't get valuations.
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Its probably increased a lot in the last year with huge potential to grow massively this console cycle.
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I don't get why YouTube didn't just leverage its own brand and create a similar service. Why buy another company for a billion dollars when they could have spent way less than that building a competitor? Twitch might have been successful, but YouTube has brand recognition and a massive install base. They would have been an instant competitor and would have likely won in the end.
Or not. I don't get it.-
there is a perception in these industries that things are becoming more and more a 'winner takes all' market (http://www.wou.edu/~shawd/mediocristan--extremistan.html). Someone achieves critical mass and now has a positive feedback loop that feeds more growth in a way that is very difficult to compete/catch up with even with massive resources. How much bigger is Twitch by the time YouTube gets a live streaming system together and promoted, apps on every platform (iOS, Xbox, etc), the same business partnerships, etc? And then how do they convince all these streamers and companies to switch to YouTube's version? The streamer has a bunch of subscribers, has invested time in setting up their channel and whatnot, has numerous links out there already to their twitch channel that would effectively become dead ads.
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How much have they dumped into Google+ so far? And it still doesn't really do anything to compete with Facebook, it's more of a "me too" service (or at least that's how it seems to me). I can only assume that they didn't want to go that route again. Absorbing Twitch, its streamer and viewer community, the API stuff and Twitch-specific community tools so many streamers rely on to add additional functionality/content/interaction to their streams, new consoles that already have integrated streaming support, etc. is a lot easier than trying to roll their own and then convince people to switch.
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It still comes down to being able to attract the user base, which belongs almost solely to Twitch at this point. I have no faith that Google could throw a billion dollars at Youtube live streaming and come out with a product capable of attracting enough users to justify the investment, and apparently neither did they.
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it's not really clear how aggressively twitch has tried to monetize streams. Where are you seeing their revenue? In any case, revenue is meaningless without profit.
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I believe annual. They don't announce their numbers so everything is analyst guesses - http://www.forbes.com/sites/davidewalt/2013/11/13/the-espn-of-video-games/
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100 million users = 1 billion dollar buyout. That's my current rule of thumb. It doesn't matter if those users monetize or if you're losing money. If you can get 100 million users to regularly use a service you can sell for a billion dollars.
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It's clearly not the only metric.
I think in 10 years we'll look back and say that Facebook got a deal on Oculus. VR is the future of this I am certain.
Also worth noting that these days 1 billion dollars isn't a lot. Not for multi-national tech companies at least. At some point last year Google had 50 billion in cash. Apple has like 150 billion in cash. They literally have more money than they know what to do with. Acquisitions isn't an unreasonable use of a war chest.
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no no no no no no nno on ononon ononononononoonno fuckfuckfuckfuckfguckjfuckfuckfuckfuckfuck you google in your gigantic fat fucking nerd ass.
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Given the way Content ID works for both VODs and streaming with Youtube as it is I can't help but wonder if this will push people to alternative streaming site.
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Boo. Don't need google/youtube fucking up another video site.
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UPDATE: Not a sure thing, according to WSJ.
http://online.wsj.com/news/articles/SB10001424052702304422704579570601736756672
The talks are at an early stage, and a deal isn't imminent, the people said. The potential purchase price couldn't be learned. Twitch also has considered raising additional funding instead of selling the company, according to one of the people.-
"Raising additional funding" sounds far less ominous than "exploring other revenue options" (even if they both point to exactly the same activity).
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If we could only talk about things we were experts on itd get boring pretty quick
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I have plenty of such opinions, in areas where I'm informed enough about the general background to think I can speculate. For this kind of thing I don't have a clue. And it has nothing to do with Google being connected. I'm really just completely without any idea of how to come up with a rational estimate.
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it's also a subset of cash on hand. these companies have so much money that accuracy of valuations of the target company aren't really required. so when you look back historically when companies had to balance debt and assets, the target company really had to be pegged well. now, it's make it rain time - which also will be judged in a historical fashion. corporations are cutting staff, cutting R&D, ensuring their margins are inflated. and they are. profit is at an all time high... so, what to do with the cash?
when you have that much idle cash, the valuation is almost irrelevant, it's just a payback period analysis of how quickly you can absorb their revenue stream.
anyway it's not really a sign of wack valuations - it's a totally wack amount of idle cash
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Depends on what current ownership structure looks like. If I owned 10 percent I'd gladly take a guaranteed 100 million today as opposed to maybe possibly more in a few years. Taking on additional funding also means dilution so you'd have to grow that much more just to get back to 100m.
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Mark Zuckerberg said no to over $1 billion for Facebook early on, and he owned more than 50% of it at that time. The valuation at the time said that $1 billion was a lot more than it was worth, but he was willing to wait it out, and that paid off. I'd probably take $100 million too, but sometimes it pays to say no and keep growing.
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Facebook didn't have the burden of having an elephant in the room. Sooner or later, like any other broadcast stream media platform, other companies will start using every copyright law in the book to try and get a piece of the lawsuit pie.
Twitch probably knew that sooner or later they would have to confront this once they get large enough. They've been flying under the radar so far but they are getting large and sooner or later they'll make a blip. Rather than having to deal with this issue, they probably found it better to get a good number for handing it off on a company that is more technically competent and well versed in dealing with this issue. Twitch was lucky enough to get a value for much more than Youtube. Hell, for a billion I might be tempted to donate a kidney to Hitler.
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Agreed. Video game streaming and eSports are growing really fast and chances are we'll see more games take advantage and make eSport-type games. Twitch is by far the biggest in video game streaming and assuming they can keep that lead I can see them making several times more what they're making now in advertising and other revenue. I hope for their sake they make a shit ton of money, but I also hope they don't get ruined by a buyout, if there is one.
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I'd say with the continued success of video games in general, the continued growth of online games and eSports over the past several years, and the way eSports are seen in places like South Korea, I'd say it's extremely likely. Nothing's a sure thing, but it seems like a very safe bet IMO.
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Twitch is AWESOME.. however, what the heck is happening with the Youtube on deal with Twitch? =/
