Has YouTube Dropped $1B to Buy Twitch?

Written on
May 19, 2014 
Mike Daly  |

ADOTAS — Various news outlets are reporting that YouTube may or may not have agreed to acquire videogame-streaming company Twitch for $1 billion, give or take a few sheckles.

Variety apparently broke the story yesterday afternoon, reporting that the deal is done and an announcement is imminent. However, The Wall Street Journal is rerporting this morning that while YouTube parent Google is in talks to buy Twitch, it’s too early to say that the deal is done.

Meanwhile, The Verge quotes sources close to the negotiations as saying the deal is close, but the requisite cigars haven not yet been fired up. Should the deal go through, says The Verge, Google/YouTube will have beaten several suitors, not the least of which is Microsoft, to the proverbial punch.

Amid all the speculation, Eric Johnson of Re/code has offered his take on why a YouTube/Twitch marriage would make sense.

“As for the rationale, here’s an easy way to think about it: Facebook’s Instagram deal. That is: Google — specifically YouTube, in this case –  is Facebook.  And Twitch is Instagram,” Johnson wrote. “… Today, a top Twitch channel for a game like Hearthstone or League of Legends can easily attract tens of thousands of live concurrent viewers at any time. But there are many, many smaller channels — Twitch says about a million of its users are also broadcasters – that are made for and watched by much smaller audiences. The site makes money from video ads that can be targeted to certain channels or games, and from paid subscriptions to channels that remove those ads. Subscriptions generally cost about $5 per month, and Twitch says about 300,000 of its viewers are paying subscribers to at least one channel.”

So what does Google/YouTube have to say about all of this? “We don’t comment on rumors or speculation,” said a Google spokesperson.

Mike Daly is an award-winning writer and editor with 30 years of experience in publishing. He began his career in 1983 at The News of Paterson, N.J., a long-since defunct daily paper, where at age 22 he was promoted to the position of Editorial Page Editor. Since then he has served in managerial capacities with several news organizations, including Arts Weekly Inc. and North Jersey Media Group in New Jersey and Examiner Media in New York. His work has been honored on numerous occasions by the New Jersey Press Association and the Society for Professional Journalists.

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