This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Google Buying Twitch Would Make Sense

Stocks in this article: GOOG MSFT FB AMZN

NEW YORK ( TheStreet) -- Twitch.tv, the popular online video-streaming service that lets gamers watch others play video games, is in talks to sell itself to Google (GOOG).

Citing sources familiar with the deal, Variety reports that Google's YouTube has reached a deal to buy Twitch for more than $1 billion. The talks are at an early stage, and a deal isn't imminent, the Wall Street Journal reported, while Techcrunch reported that Twitch could be valued at around $1 billion.

Twitch, based in San Francisco, reportedly chose an offer from Google over multiple other offers including one from Microsoft (MSFT), according to news Web site The Verge.

Google seems like the most natural fit, considering the company's YouTube could help Twitch scale its technology and infrastructure to keep pace with its growth.

The streaming service has become a destination for broadcasting gaming videos and the popular Let's Play videos, growing to 45 million monthly users and 1 million users who upload their own videos each month.

Launched in 2011, Twitch has already surpassed Facebook (FB), Amazon (AMZN), and video-streaming service Hulu in "peak" traffic, which is broadband traffic during prime-time hours, according to infrastructure firm DeepField.

"To be quite honest, we can't keep up with the growth," Twitch marketing VP Matt DiPietro told The Verge last year, adding "That's a good problem to have."

For Google, Twitch could boost YouTube, which has its own live-streaming service for games, music, sports and news, but which lags Twitch. According to online video and networking firm Qwilt, Twitch accounted for almost 44% of U.S. live-streaming traffic by volume in the week of April 7, 

Similarly, video-game content is popular on YouTube, making the deal even more attractive. Felix "PewDiePie" Kjellberg's YouTube channel featuring video-game montages has 27 million subscribers, more than any other individual YouTube personality, according to VidStatsX.

Twitch is growing too fast to know where to turn next, while YouTube wants to improve its live streaming, making a union between Google and Twitch a good fit.

>>Read More: Google Is Close to a Deal for Twitch

>>Read More: Why Apple and Google Ended Their Thermonuclear Rift

>>Read More: Once Wall Street Bankers, Now Consultants

At the time of publication, the author had no position in any of the stocks mentioned.

Follow @macroinsights

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.


WATCH: More tech videos on TheStreet TV | More videos from Keris Alison Lahiff

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs