This Day On The Street
Continue to site right-arrow
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!

Google and Twitch: Making Sense of the Rumored $1B M&A Mega-Deal

Stocks in this article: GOOG GOOGL AAPL NFLX LNVGY

NEW YORK (TheStreet) -- Rumors are swirling that Google (GOOG) will bet big with As reported in Variety, a preliminary deal is taking shape for Google to buy Twitch for more than $1 billion. Google's latest M&A plans are apparently no secret, as the company snaps up disruptive technologies to shake things up.

"We completed another great quarter. Google's revenue was $15.4 billion, up 19% year on year," said Larry Page, CEO of Google. "We got lots of product improvements done, especially on mobile. I'm also excited with progress on our emerging businesses."

Google's stock was trading over $560 late Thursday, down about 0.25% for the day, and essentially flat for the year to date.

Google's video service YouTube will be transformed through the addition of Twitch's live video gaming platform, which has more than 45 million monthly viewers. Susan Wojcicki, a Google ad executive, was named CEO of YouTube earlier this year.

Making way for the rise of the "Second Screen" TV

So what might Google see in Twitch?

Twitch is a kind of ESPN for video games -- a network to discuss and showcase gamers' highlights. The company can provide new, compelling, immersive entertainment experiences, possibly to expand TV viewing to a second screen just as Twitch has done for gaming.

Plus the deal promises a growing audience. Millennials and gamers are a gold mine for advertisers. As of 2014, Twitch accounts for 1.8% of total U.S. internet traffic during peak periods. It's the fourth-largest site for Internet traffic during peak times in the U.S., behind Netflix (NFLX), Google and Apple (AAPL) -- so Twitch may become a rival to the streaming giants.

User-generated content has the benefit that Twitch has very low up-front costs. Twitch currently has 6,100 broadcasting partners, with $5 monthly subscriptions granting users access to content, chat rooms and events.

Valuation measures could pose a difficulty for the company. Twitch's content is, for the most part, user-generated. The question at hand is the value of Twitch's user engagement and activity levels.

Will Twitch fit in with Google X or Google Ventures?

Google looks to acquire companies that can quickly scale up, that offer the right technology and talent, and that target a core functionality that will apply across Google's product offerings.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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