For comparison, Google bought YouTube for $1.65 billion, making this Twitch.tv deal one of its biggest in the history of its video hosting and streaming service. But while YouTube has become the household name for watching videos, or even listening to music, online, Twitch.tv maintains its lion's share when it comes to live broadcasting, especially when it comes to games.
It's not that YouTube doesn't have these features as well. At least now it does. It has recently been heavily marketing its live broadcasting features, but, to some extent, it might just be too little too late. As of April 7 this year, Twitch.tv has accounted for about 44 percent of the US live streaming traffic, not an insubstantial number for a single service. And as in they say in business, if you can't beat them, buy them.
But this isn't just popularity we're talking about. In the end, this acquisition speaks to the very heart of Google's business: ads. YouTube has ads. Twitch.tv has ads. But Twitch.tv viewers are more engaged compared to their YouTube counterparts, sometimes spending hours watching live or even replays of their favorite events. YouTubers, on the other hand, usually watch videos in spurts. Naturally, Twitch.tv users are ripe for the picking for advertisers.
Of course, details are still scarce on this rumored deal and both companies declined to comment. Should it prove to be true and pass regulators' scrutiny, this acquisition would further cement Google's position in both the video streaming market and the online advertising business.
SOURCE: Wall Street Journal