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Amazon Buying Twitch For $970 Million, Google Misses Another Social Opportunity

Twitch-logo"Sources" fell flat on this one. It was widely rumored, though Variety is generally credited with first, that Google was buying Twitch Interactive and it would be somehow connected to their YouTube empire. Instead Amazon yesterday announced an agreement to acquire Twitch. The video network, which features people playing video games, has a huge audience and a great deal of content that has raised issues around music licensing. Twitch has addressed some of those issue but much remains to be sorted out. In addition, Twitter recently added concert live streaming.

Amazon yesterday announced their agreement to acquire Twitch:

"Under the terms of the agreement, which has been approved by Twitch’s shareholders, Amazon will acquire all of the outstanding shares of Twitch for approximately $970 million in cash, as adjusted for the assumption of options and other items. Subject to customary closing conditions, the acquisition is expected to close in the second half of 2014."

Twitch's numbers and audience are impressive:

"In July, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch produced by more than 1 million broadcasters, including individual gamers, pro players, publishers, developers, media outlets, conventions and stadium-filling esports organizations."

It should be noted that Google's only true social success to which it has shown deep commitment is YouTube. Google had to buy YouTube to get that. So Google missed the one kind of social network it has succeeded with in the past.

Twitch appeared to be preparing for possible acquisition with moves to mute infringing audio, of which there is a great deal, and shutter

In related music news, Twitch also recently debuted live streaming music concerts.

So Why Does an Ecommerce Company Want A Video Gameplay Network?

Amazon hasn't just been an ecommerce company for a long time. They're also a publishing house, run ads on Amazon with their own ad network said to be on the way, provide cloud storage and all sorts of other stuff.

Let's turn to the experts for industry analysis:

Why Amazon Is Paying $1 Billion to Help People Watch Video Games

"Twitch gives Amazon an addition[al] aspect to its video-game business and its digital video business, and it adds a unique social network to the company’s media plans. There’s a lot going on there. There’s also a very simple bonus. By buying Twitch, Amazon gets its hands on something Google evidently wanted and can’t have."

Why it makes sense for Amazon to buy Twitch

"Reading between the lines a little, it sounds like Twitch felt at Google, it would have always been YouTube's little brother. At Amazon, it has the chance to build something from scratch, as Amazon has no user-generated or live video offerings yet. A source familiar with the deal suggested Twitch felt Amazon would give it more autonomy and bigger role in growing the gaming business."

Amazon Acquires Twitch In $1 Billion Video Landgrab

"In acquiring Twitch, Amazon continues its march to monetize video. The company detailed plans in February around a partnership with premium sell-side ad video ad server FreeWheel to 'create a video offering and increase their ecommerce sales at the same time.'"

"Although Amazon's initial focus with video was expanding ecommerce ad units, Amazon Media Group's VP of global advertising Lisa Utzschneider said integrating advertising with short-form content ranging from game trailers to how-to videos, would also be a priority."

Clyde's Take: Amazon Want Be Bigger, Will Eat World.


Hypebot Senior Contributor Clyde Smith (@fluxresearch) recently launched DanceLand. Send news about music tech startups and services, DIY music biz and music marketing to: clyde(at)fluxresearch(dot)com.