Per VentureBeat reports, search giant
) has finally reached a definitive agreement to acquire Twitch, a
video game streaming company for $1 billion. It has been two months
since rumors of a potential acquisition spread. However, neither
party was available for any comments.
Twitch, founded in 2011, is a live video broadcasting platform and
community for gamers, which boasts over 45 million users per month.
It allows worldwide gamers to connect by enabling them to
broadcast, watch, and chat from everywhere they play. In
November last year, it partnered with Microsoft's (
) Xbox One and Sony's (
) PlayStation 4, which widely increased its popularity.
Additionally, Twitch also distributes shows from gaming and media
streaming associates including CBS Interactive's GameSpot, Joystiq,
Machinima Inc. and Destructoid.
If the reports turn out to be true, the acquisition would mark one
of the largest acquisitions in Google's history. YouTube is a
leader in both video and music streaming segments, which it had
purchased in 2006 for $1.65 billion. The addition of Twitch to its
portfolio will further enhance the position as the web's undoubted
video streaming leader.
It will give YouTube access to all Twitch's video partners, thereby
boosting its video broadcasting capabilities. Google can also
integrate Twitch's subscription video model to YouTube to reach its
goals of capturing a larger portion of the online video gaming
market. It will also help Google broaden its efforts to bolster its
own lineup of live events on YouTube.
YouTube is rapidly becoming the main growth driver for Google as
the company has been taking different initiatives to further expand
its video business. In relation to these efforts, Google recently
launched the Partner Select program, an interface to connect
publishers and ad agencies for video ads. It is a programmatic ad
exchange platform for video ads, which will enable publishers
monetize their video content. It will also help marketers reach
high-quality video content on the web.
The move will help Google increase its revenues from video ads.
However, stiff competition in the overall video ad market from
companies like AOL (
) and BrightRoll remains a headwind.
Google currently holds a Zacks Rank #3 (Hold).
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