Google buying spree continues: Is Twitch next on the list?
Google continued its buying spree yesterday, confirming the purchase of a New York startup called Divide - which offers businesses the ability to manage their employees' Android mobile devices. But its biggest target is reportedly still in the works: Video game-streaming service Twitch.
More buys?
Google's acquisition of Divide gives it a foothold in the enterprise space with a company smaller yet similar to Airwatch, which was acquired by VMware for more than $1.5m, and Sunnyvale's Good Technology, which filed for an initial public offering last week.
Google confirmed the Divide purchase but did not disclose a price for the company, which had raised about $25m in venture financing after being founded under a different name -- Enterproid -- four years ago.
However the price Google paid for Divide is "highly unlikely" to approach the price tag reported for San Francisco-based Twitch, said the San Jose Mercury News. Variety reported that Google-owned YouTube is close to announcing the purchase of the video game-streaming company for more than $1bn.
This puts it in league with other recent megamergers from the company , such as Nest Labs and Waze. The Wall Street Journal also reported on talks between the companies, but were not as adamant about the possibility of a done deal, reporting that no firm price had been disclosed and saying that completion was not imminent.
Twitch allows video game fans to broadcast their gameplay live or tune in to such broadcasts on its service. It spun out of popular online video site Justin.tv in 2011. The site's setup brings in viewers for longer amounts of time than typical YouTube visits, which generates more premium ads that would help Google's video-sharing service, Seth Bardelas of video-advertising software company TubeMogul told the Journal.
Citigroup analyst Mark May ran the numbers on the deal and decided it would be a strong move by Google, writing that Twitch "has not only become the leading player in 'game broadcasting' but also one of the largest providers of online streaming video."
Using metrics for Twitch viewership and ad rates for YouTube, May says Twitch could generate $200m a year for Google in ad revenues at current levels. This doesn't even take into account the growing popularity of Twitch, which reportedly doubled average monthly viewers in 2013. May also noted that Twitch has a subscription service, Turbo, that would generate another $200m a year if just 5 percent of the service's viewers paid for it.
"In short, we like the strategic synergies and see the building blocks to a rational (even attractive) price tag," May wrote.
Google stock gained 2 per cent to $538.83 Monday .
GoPro's IPO filing was made public on Monday afternoon. The action-camera company showed revenues that would have put it in the top 60 Silicon Valley technology companies in terms of sales in 2013. GoPro's filing showed that the company has been profitable each of the past three years,and produced revenues of nearly $1 billion in 2013 - more than many high-profile Bay Area tech companies such as Cypress Semiconductor, Twitter and Workday.