Amazon swoops in under Google, buys Twitch for $970M

Steven Loeb · August 25, 2014 · Short URL: https://vator.tv/n/38cd

It had been reported that Google had bought the company weeks ago, but that deal fell apart

Hey, remember a few weeks back when it came out that Google was close to buying social video platform Twitch? It was even reported that the two companies had even signed a deal worth $1 billion. Basically, it looked like a done deal.

Well, something obviously went horribly wrong since then for Google, as it just had the company scooped right out from under it. 

Following reports on Monday that Amazon was about to swoop in and finalized its own deal to buy Twitch, Amazon has now made it official: it has purchased the company in a deal worth $970 million.

Twitch, which allows gamers to record live broadcasts of their videogames, was spun-off from Justin.tv in 2011. Founded in 2006, Justin.tv was originally a 24/7 broadcast of the life of founder and CEO Justin Kan. Eventually it became a platform for over 60 different channels for people to broadcast their live videos.

The company officially changed its name from Justin.tv to Twitch Interactive back in February, and Justin.tv was shuttered earlier this month. 

Amazon now has three options for what it can for what it can do with Twitch: it can either integrate it into existing services, it can shut the service down and use the purchase to bring on the team, or it can let it operate independently, 

blog post from Emmett Shear, CEO of Twitch, indicates that Amazon is going with the third option, at least for now. 

"We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster," he said. "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."

"First and foremost we want Twitch to keep going as they were before. The only 'change; really, is to help them move faster. We look forward to learning from Twitch and finding the ways we can best help," an Amazon spokesperson told me. 

For Amazon, getting access to Twitch gives it a leg up in two spaces: Internet streaming and gaming.

“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, Jeff Bezos, founder and CEO of Amazon, said in a statement.

"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.”

So what happened to the deal with Google? Well, it appears that the deal had not gone quite as far as it had been reported, and while there were talks between the two sides, Google was fearful of closing the deal due to anti-trust concerns, as it already owns video-streaming platform YouTube, according to a report from Forbes.

The main sticking point seems to be that the two side could not agree on the size of a potential breakup fee if the deal was rejected by regulators. VatorNews reached out to Google, but the company had no comment.

Twitch raised a total of $35 million in venture capital funding, most recently a Series C $20 million investment led by Thrive Capital with participation from WestSummit Capital and Take-Two Interactive Software in October 2013.

Amazon purchases

This is Amazon's third acquisition this year.

In February it purchased gaming studio called Double Helix Games, and in April it bought cloud-based digital comics platform comiXology. 

The company also made four acquisitions last year: IVONA Software, which provides text-to-speech technology; GoodReads,  a social network for books; Liquavista, which develops color e-paper video screens; and TenMarks, which helps teachers and parents deliver innovative mathematics curriculum to students.

(Image source: cheezburger.com)

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Justin.tv

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Justin.tv is building the destination site for broadcasting and watching live video online while chatting with friends. Justin.tv tears down the walls of traditional video and social networking sites by enabling viewers and broadcasters to interact and exchange ideas in real time through chat and live video.

In the past, live broadcasting was only available to large media corporations who were willing to spend millions of dollars. Today, Justin.tv has democratized live video by shrinking all of the functionality of an expensive TV satellite trunk into a simple laptop or desktop computer.

The Justin.tv live video network is powered by Python Media Server - a custom built live streaming video server cluster. The network can support thousands of live broadcasts and over 100,000 simultaneous viewers and is 100% owned and operated by Justin.tv.

The Justin.tv chat system is powered by the JTV Twisted Chat Server - a custom built chat server that implements a wide variety of filtering and moderation techniques and relays well over a million messages a day.

Justin.tv has hundreds of thousands registered users and receives millions of uniques and tens of millions of pageviews per month.