Google Inc(NASDAQ:GOOGL) (NASDAQ:GOOG) is at the early stage of discussing an acquisition deal of Twitch, which is a live video streaming service that is growing quite fast, says a report from the WSJ citing two people aware of the issue. The deal is not about to happen any time soon, and the price at which the deal could be finalized has not been confirmed. Twitch is in no mood to sell the company, instead it wants to raise additional funds for the company.
Twitch – growing popularity
Twitch -launched in June 2011, has overtime become the favorite Internet destination for the viewing and broadcasting video game. This start-up was able to raise some $20 million in September from investors including Thrive Capital and Take-Two Interactive Software, a video game maker.
Qwilt, which is an online video and networking firm, informed that in the week of April 7, about 44% volume of U.S. live streaming traffic was accounted for by Twitch while YouTube Live lagged behind. Monthly unique visitors count for Twitch was more than 45 million in the month of February and of these one million people were such, who access the site for creating and streaming video content. On demand content is a much larger market and is dominated by YouTube and NetFlix, Inc. (NASDAQ:NFLX) while Twitch lags behind them for online video streaming of all types.
Advertising factor behind growth
YouTube video service by Google Inc (NASDAQ:GOOGL)(NASDAQ:GOOG) will get a potential boost once it acquires Twitch. News, games, sports and music related live streaming services are owned by YouTube. It also owns events such as jump from space from Felix Baumgartner. YouTube has been facing the challenge of finding a way of charging higher prices for the ads that it sells considering the huge video supply that is available to the advertisers, and this acquisition might help in its objective.
The vice president of business development at Quilt, Mark Fisher, said that advertisers find Twitch quite attractive as it has a large audience, which is growing day by day. Most of their time is spent on the site sharing and viewing live gaming videos.
YouTube doesn’t “have the engagement, and engagement is what drives advertising,” Mr. Fisher added. “Google can try to build this on its own or they can buy something that’s already out there and doing well.”