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What the Heck Is Twitch, and Why Does Google Think It’s Worth $1 Billion? [UPDATE: Amazon Bought Twitch]

Daniel Bean
Editorial Assistant
Yahoo Tech
July 25, 2014

What the Heck Is Twitch, and Why Does Google Think It’s Worth $1 Billion? [UPDATE: Amazon Bought Twitch]

Daniel Bean
Editorial Assistant
Yahoo Tech
July 25, 2014

UPDATE (2): It’s official. Amazon, not Google, has acquired Twitch for $970 million, the two companies announced on Monday.

UPDATE (1): After a couple months of dancing, the Google/Twitch acquisition was confirmed Friday at the $1 billion price tag. The service will become a part of YouTube.

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Word on the street is that Google has an itch for Twitch.

Recent reports have YouTube, Google’s very popular video hosting and streaming service, eyeing a deal to acquire video game broadcasting service Twitch for more than $1 billion.

Ho-hum, Google is purchasing yet another company I’ve never heard. What’s the big deal, right? Well, this one could be important.

What is Twitch?
Twitch.tv was launched in 2011 as a video game, or video game competition, broadcasting branch of Justin.tv, which is a personal streaming service website similar to Ustream.

On it, gamers and gaming enthusiasts create their own Twitch channels to either broadcast live PC or console gameplay or host their own video game-themed video podcast programs for others to watch.

Enemy Front - Stealth

The site has also become known for broadcasting live video game trade shows and video game competitions, also called eSports

Twitch is regarded to be the most popular service of its kind for gamers, with roughly 45 million unique visitors monthly. That’s up from 30 million unique visitors last year. In terms of bandwidth, Twitch’s traffic is higher than Hulu, Amazon, and Facebook. It’s mammoth, even if you’ve never heard of it.  

Why does YouTube need Twitch?
Even though Google’s YouTube service is still the king of the mountain when it comes to streaming video, it’s thought that Google sees the emergence of live-streaming, particularly video game streaming and live video game watching, as areas worth venturing into.

Last year Google rolled out a streaming gaming service of its own, beckoning game developers to add the live YouTube streaming feature into their titles. Unfortunately for YouTube, the foray into live video game streaming has seen only mild success, while Twitch has continued to pick up steam, with more than 1 million broadcasters on the site.

New Twitch console apps built for the recently released PlayStation 4 and Xbox One will also make streaming without a PC possible moving forward. You can just upload to Twitch straight from the machine. 

The Twitch PlayStation 4 app. (twitch.tv)

In the area of live streaming in general, video gaming or otherwise, YouTube lags behind Twitch, which accounted for nearly 44 percent of all streaming traffic for a period this past April. Parent company Justin.tv this year changed its name to Twitch Interactive, so it’s unclear whether all of its general live-streaming assets would be a part of a possible Google acquisition.

If it’s so popular, why would Twitch want to sell?
For one thing: a billion dollars is pretty cool. 

In addition, Twitch has suffered from its own popularity a bit. As more members join Twitch and stream video, there are more network lag issues as a result. Last year, for example, Twitch was forced to implement a delay of up to 60 seconds for live broadcasts. The beefier bandwidth capabilities of YouTube will help Twitch continue to provide faster and more reliable streams for its members.

(tumblr.philosoraptor.creatememe.com)

Even if the Twitch service isn’t integrated directly into YouTube, Google can provide the resources necessary to facilitate an even more robust expansion in streamers and viewers.

If I’m a Twitch fan, how should I feel?
We think you should probably be excited, for the reasons listed above. More money, and more resources, should be an epic win (sorry) for gamers. Just look what Google did for a tiny startup called YouTube back in 2006.

Also, speculation is that Google is particularly interested in the Twitch brand. We could see Google do for Twitch what it did for YouTube eight years ago: keeping it mostly separate, letting it operate independently, and growing it as its own entity, rather than as a part of Google.

(reflectzyn.co)

When is this happening?
This weekend’s report out of The Wall Street Journal claims that talks between Google and Twitch “are at an early stage, and a deal isn’t imminent.” So your guess is as good as ours as to when it might get done. We are not at the end of this game quite yet.

Have questions, comments, or just want to tell me something funny? Email me at danbean@yahoo-inc.com.