Amazon Beats Google With Twitch Purchase

By Rory Betteridge | 26 Aug 2014

Amazon continues to make headlines with the acquisition of premier live streaming service Twitch, after heavy market speculation that YouTube was set to make the purchase.

In a new development of Amazon’s increasing hostilities toward search engine Google, the sale of popular streaming service Twitch.tv has been made to Amazon for $970 million.

Twitch represents a big investment on the part of Amazon, with the streaming service becoming Amazon’s largest initial acquisition offer to date. If the deal closes as it is, Twitch would be Amazon’s second most expensive acquisition overall, behind only clothing retailer Zappos ($1.23 billion) and ahead of Quidsi, LivingSocial and Audible. Twitch represents a high-profile and high-value acquisition for Amazon, with its 50 million viewers every month representing a strong marketing opportunity.

“Broadcasting and watching gameplay is a global phenomenon and Twitch has built a platform that brings together tens of millions of people who watch billions of minutes of games each month – from The International, to breaking the world record for Mario, to gaming conferences like E3. And, amazingly, Twitch is only three years old,” said Jeff Bezos, founder and CEO of Amazon.com, via a press release this morning. “Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.”

“We chose Amazon because they believe in our community,” said Twitch CEO Emmett Shear in an official statement on the Twitch blog. “They share our values and long-term vision, and they want to help us get there faster. We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon’s support we’ll have the resources to bring you an even better Twitch.”

Market speculation over the past few months had predicted Google subsidiary YouTube to purchase Twitch, a live streaming and archival service that mainly caters to video games enthusiasts, and the online video giant had made an offer of $1 billion for the website back in July. Twitch would have been a popular target in the YouTube boardroom, with Twitch’s 50 million monthly viewers accounting for 40 percent of the world’s live streaming traffic, fourth overall in total traffic with only Netflix, Apple and Google itself generating more.

Further fuelling rumours of a purchase were several changes in policy in the past months, speculated by users to make the website a more attractive prospect for purchase; these changes included tighter controls over copyrighted content as a safeguard against litigation and newly imposed archive limitations to reduce operation costs. These changes, particularly copyright measures similar to those found on YouTube, led many Twitch users to suspect a deal with YouTube was close.

Forbes report that Google baulked at the idea of purchasing Twitch, described as “the ESPN of video games”, because of antitrust issues. “Google was unable to close the deal, said sources familiar with the talks, because it was concerned about potential antitrust issues that could have come with the acquisition,” writes Ryan Mac, “One source noted that because of the concerns, Google and Twitch could not come to an agreement on the size of a potential breakup fee in case the deal did not go through.”

Whatever the reason, a sale to Amazon seems to have been preferable to a sale to Google for most of its customers:

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