Google-Twitch reportedly thwarted by antitrust issues; Amazon rallies


Google (GOOG -0.5%) was unable to buy Twitch due to concerns about "potential antitrust issues" related to the acquisition, Forbes reports. Due to the antitrust issues (stemming from Google's ownership of YouTube), the companies reportedly couldn't agree on a breakup fee.

Meanwhile, Amazon (AMZN +2.4%) is rallying amid favorable reviews for the Twitch acquisition. Analyst Jan Dawson sees Twitch expanding Amazon's advertising scale and drawing in new customers, and thinks its streaming tech could strengthen other Amazon services. "Amazon is clearly taking digital media very seriously, and spending heavily to fund it."

The Verge's Ben Popper observes Twitch will get to make full use of AWS, and will now have Amazon's resources to help with licensing. VC Ethan Kurzweil (a Twitch investor) thinks non-gaming use cases are possible. "We think that Amazon is investing here in Internet infrastructure and something more than gaming media ... What Twitch has really built here is a video-based community around any activity."

Yesterday: Amazon buying Twitch for $970M in cash

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Comments (23)
  • Stone Fox Capital
    , contributor
    Comments (9904) | Send Message
     
    As an interesting note, the kids in my family hardly even no about Twitch. Most of them actually watch games on YouTube. Possibly its only the 15 yr old that plays the big action games that would be interested in using Twitch, but he prefers to just play with buddies online.
    26 Aug 2014, 12:56 PM Reply Like
  • bpork
    , contributor
    Comments (68) | Send Message
     
    I see that as opportunity (untapped total addressable market) - YouTube, for some streamers who do this for a living, becomes an archive of Twitch videos.
    26 Aug 2014, 01:36 PM Reply Like
  • GRojasHruska
    , contributor
    Comments (98) | Send Message
     
    Loool, buddy, realize that StarCraft 2 is considered an international sport, that millions regularly watch daily on Twitch, that there are huge sponsored events - your kid is literally irrelevant to this acquisition. You are thinking about system play more likely - research before commentary please!
    26 Aug 2014, 01:37 PM Reply Like
  • bpork
    , contributor
    Comments (68) | Send Message
     
    I didn't see his comment as an attack - just an anecdote. Relax
    26 Aug 2014, 01:44 PM Reply Like
  • GRojasHruska
    , contributor
    Comments (98) | Send Message
     
    Not an attack, uninformed and misleading. I'm sorry if I responded negatively - I just see a lot of misinformation being deposited on SA and it worries / frustrates me.
    26 Aug 2014, 01:50 PM Reply Like
  • Gary J
    , contributor
    Comments (10886) | Send Message
     
    ...and it was a soooo interesting note!
    26 Aug 2014, 01:51 PM Reply Like
  • bpork
    , contributor
    Comments (68) | Send Message
     
    all good :) I do agree about the acquisition as you stated... I watch twitch on my phone every night! I play SC2 as well
    26 Aug 2014, 01:58 PM Reply Like
  • Allan Mason
    , contributor
    Comments (309) | Send Message
     
    How many commercials/ads do you guys watch per 30 minutes of streaming video? Just curious. Streaming hours of footage is pretty expensive, so I would think you'd been exposed to quite a bit, yes?
    26 Aug 2014, 09:36 PM Reply Like
  • bpork
    , contributor
    Comments (68) | Send Message
     
    depends on the streamer and how often they push the button to show ads...from my experience, maybe like 4 30 second ads per 1/2 hour? Sometimes you just leave the ad on if it is a user you want to support. Another thing to note, revenue does not count for people who are using adblock.
    27 Aug 2014, 02:10 AM Reply Like
  • Bouchart
    , contributor
    Comments (1134) | Send Message
     
    The basic difference between Twitch and Youtube is that Twitch is for live streams and that Youtube is for finished, recorded videos.

     

    Many Twitch streams are recorded and uploaded onto Youtube, so there is a lot of overlap. I never understood why Google was interested in the first place.
    26 Aug 2014, 02:47 PM Reply Like
  • sid18
    , contributor
    Comments (381) | Send Message
     
    "I never understood why Google was interested in the first place"

     

    Because Google wants to dominate the live stream market (which Twitch does), just as it dominates finished, recorded videos market (with Youtube).
    26 Aug 2014, 04:27 PM Reply Like
  • Hardog
    , contributor
    Comments (17019) | Send Message
     
    Bouchart

     

    Tks for that insight didn't realize the it ends up on you tube anyway.
    26 Aug 2014, 10:52 PM Reply Like
  • Hayweed
    , contributor
    Comments (400) | Send Message
     
    Interesting that amazon is using cash and not stock thus twitch's investors did not want the overpriced junk known as amazon common.
    26 Aug 2014, 02:53 PM Reply Like
  • sid18
    , contributor
    Comments (381) | Send Message
     
    Interesting take. Why would twitch's investors have a problem with AMZN stock? AMZN has plenty of liquidity. More like Jeff Bezos thought paying cash was a better deal for him than offering stock?
    26 Aug 2014, 04:29 PM Reply Like
  • CaptnGreenOwl
    , contributor
    Comments (20) | Send Message
     
    @sid18

     

    Most likely Bezos doesn't want investors re-running any EPS calcs which would be inevitable with a stock acquisition.
    26 Aug 2014, 06:12 PM Reply Like
  • Allan Mason
    , contributor
    Comments (309) | Send Message
     
    CaptnGreenOwl, AMZN trades at a PE of 900 already, and that number will shoot up over 2000 after Q3 results. Plus, AMZN dilutes its stock every quarter with stock based compensation. No one cares. Why would Bezos care about dilution now? More likely, Twitch said you can keep your bubble stock, give us straight cash homey.
    26 Aug 2014, 09:34 PM Reply Like
  • stoj
    , contributor
    Comments (775) | Send Message
     
    Amzn paid 970mil for Twitch, and its market cap increased by 3 billion on the first day ( which indicates the integrated long term value of Twitch, which is a lot better than shipping goods at 0 margin )
    26 Aug 2014, 04:12 PM Reply Like
  • Palladium31
    , contributor
    Comments (548) | Send Message
     
    I know the streamers don't pay royalties, but does anyone know if Twitch needs to pay royalties to the popular game sites/developers? For example, on any given day, most of the Twitch audience is split between viewing League (Tencent), or Hearthstone / Diablo / Starcraft (NASDAQ:ATVI). I may even venture a guess that over 50% of the entire Twitch audience are watching streamers of these two companies products.

     

    If not, perhaps now with the deep pockets of Amazon, Tencent or ATVI may try to capture some of advertising dollars in the form of royalties from Twitch. They do after all have some leverage in the form of the EULA.

     

    Anyone know how Youtube deals with these issues?
    26 Aug 2014, 09:29 PM Reply Like
  • Allan Mason
    , contributor
    Comments (309) | Send Message
     
    Why is no one asking how exactly AMZN plans to come up with $970 Million to close this deal? AMZN's recent balance sheet clearly shows they don't have this kind of dough. And you can't say they'll generate the cash through earnings in Q3, because we already know they will lose a ton of money in Q3.
    26 Aug 2014, 09:31 PM Reply Like
  • Hayweed
    , contributor
    Comments (400) | Send Message
     
    Amazon will be losing $750 million this quarter thus a cash crunch is imminent. Add the twitch deal and amazon is in big trouble. if they have cash abroad, they will have to pay the 35% penalty to bring it ashore. Add in the fact that the fire is a super dud and will lead to a huge write off the next few quarters. this stock is poised to dive soon.
    26 Aug 2014, 11:05 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    Eric Schmidt you are not the next Bill Gates
    27 Aug 2014, 02:39 AM Reply Like
  • Piptief
    , contributor
    Comments (1321) | Send Message
     
    This is another dud acquisition by amazon. Company reducing shareholder value buying everything in sight, along with google and releasing flop products at the end. Whither the latest and greatest fire phone? Man, and the stick price is rallying on that news? Lots of dumb investors in the market.
    27 Aug 2014, 08:18 AM Reply Like
  • Gary J
    , contributor
    Comments (10886) | Send Message
     
    "Lots of richer dumb investors in the market."

     

    Fixed that for you. lol
    27 Aug 2014, 08:39 AM Reply Like
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