Google seems to be on a shopping spree this season as it is quite busy acquiring other companies and adding them to its hall of fame. The American company has finally struck a deal with the Videogame broadcasting company Twitch for a hefty sum of $1 billion and according to the latest reports, the deal is in final stage.
There have been several rumors lately that Google was looking to acquire Twitch for $1 billion, but nothing concrete had been released in the news. The news about the acquisition is not official yet though, and the authorities of either of the companies denied giving any statement.
Twitch had been founded by the owners of Justin.tv, which is a website designed for people who like to “lifecast” their own self through online videos. The popularity of Justin.tv began picking up speed as an ample of videogamers started using its services to broadcast their gameplay. Looking at the stats and the mood of the fans, the founders of Justin.tv created Twitch.tv in the year 2011 which was dedicated to video broadcasting.
In spite of several buyout offers, including Microsoft, Twitch felt that Google’s YouTube will help the company to further grow and can become a solid platform for watching and streaming live video gaming. Twitch, a start-up was launched in 2011 as a live streaming service and raised more than $20 million for investors in 2013.
Twitch raised as many as $35 million in terms of funding, and the deal worth $1 billion is definitely worth a laugh for the creators of Twitch. The San Francisco based company possesses in excess of 45 million users who view 106 minutes of gameplay on a daily basis. The users are also given the freedom of uploading gameplays for free.
The revenue that Twitch generates through advertisements and subscription through 300,000 of its paid members is huge to say the least. There is no other reason why Google got attracted to it and thought of buying it for a colossal amount of a billion dollars. YouTube will be able to extend its live streaming to more categories with the help of Twitch, for example with Disney’s Maker Studios and Machinima. Both these companies focus profoundly on the male oriented videogame segment.
Another reason why Google is interested in buying Twitch is because the company has already set up a subscription model for such videos. It was about a year ago that YouTube joined hands with 30 partners in order to have a paid channel service. However, until now the paid channels have not been so popular, but the amalgamation of Twitch into it will bring wonders to the fortune of YouTube.
According to the reports, in March 2014 Twitch recorded a downstream bandwidth count of 1.35 percent in the North American broadband networks in the peak hours. This is another big reason why Google would be happy enough to join hands with Twitch.