News By Aug. 26, 2014 8:27 am
Google backed out of Twitch acquisition | News |

Yesterday we heard the surprising new that Amazon, not Google, has succeeded in acquiring video streaming service Twitch for $970 million. It was a surprise because the Google deal looked to be already done, and the suspicion was that Amazon had swooped in at the last minute and made a better offer.

It now looks as though that wasn’t the case. Rather than losing out to Amazon, Google backed away completely from the acquisition. The reason? Potential antitrust problems.

According to Ethan Kurzweil of Bessemer Ventures Partners, a company invested in Twitch, there were a number of companies interested in buying Twitch, not just Google. Google came to the table first, but they were soon joined by others and Amazon ultimately made the best offer.

The sticking point for Google was a concern over antirust issues because they already control a massive chunk of the online video market. It is thought an agreement couldn’t be reached as to the breakup fee that would be paid if antitrust concerns stopped the deal happening. Instead, Twitch becomes Amazon’s largest acquisition in its history (Zappos is pushed into second place costing the company $850 million back in 2009). The $970 million in cash Amazon agreed to pay may end up being $1.1 billion taking into account possible add-ons when the deal closes before 2014 is over, barring any regulatory reviews.

From Google’s perspective they have lost out on some 50 million extra monthly video views and the chance to take control of a leading live streaming platform. But that’s clearly of lesser concern than the cost of an antitrust investigation and potential breakup. Amazon wins, Twitch wins, Google now has to regroup and think about how it will better compete with Twitch going forward.

Google backed out of Twitch acquisition | News |


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