What: Google has made a deal to buy video game-livestreaming firm Twitch for US $1 billion, which will join its major Youtube property and expand its video empire.
Why it matters: The acquisition will expand Google’s video ad inventory beyond YouTube and create more opportunities for advertisers.
Google has bought game-livestreaming firm Twitch for US $1 billion. Although further terms of the deal were not disclosed, the acquisition will definitely expand Google’s video ad inventory beyond YouTube. The deal underlines the value of live Internet streaming and the rise of competitive gaming as a spectator sport — something that attracts millions of viewers and provides millionaire opportunities for advertisers.
Launched in 2011, San Francisco-based Twitch is an aggregation site for streaming video games in real-time that hosts more than 50 million monthly users. Users can broadcast their desktop, Xbox One or PlayStation 4 sessions to online viewers. The company counts with a subscription model that allows streamers to deliver perks to channel subscribers. The site is ad-heavy already, but still, could be a major platform for Google’s programmatic video ad strategy. The startup has raised about US $35 million so far.
On the one hand, tech and financial analysts have agreed on Google’s acquisition of Twitch being good for gamers and live streaming service. On the other hand, many gamers fear that Google’s strict moderation of YouTube content could carry over to live streaming and cut down the Twitch experience.
Back in 2006 when Google bought YouTube for US $1.65 billion , the search engine giant had plenty of work to do with enforcement of music copyrights, but Twitch already has relationships with game publishers. Actually, according to Twitch, many major game publishers have already signed a deal with Twitch that will allow their games to be shown on the network.
Now Google’s YouTube division is said to be in charge of the acquisition, which would definitely transform YouTube’s business.