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Report: YouTube to acquire Twitch for $1 billion

Google to buy Twitch for $1 billion
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How much is Twitch worth? (Credit: Twitch)

Two online video titans are about to team-up.

Variety and The Wall Street Journal are both reporting that Google's YouTube is in negotiations to buy video game streaming service Twitch. Variety says the deal has been reached, with a price of $1 billion. The WSJ, though, contends talks are still in an early stage.

Should the deal go through, it would be a massive validation for Twitch, which has become the Internet's go-to spot to watch and broadcast live gameplay sessions in a mere three years.

Assuming that $1 billion price tag is correct, this would be the fifth largest acquisition in Google's history -- right below the company's 2006 purchase of YouTube for $1.65 billion -- underscoring the site's importance to Google.

Twitch has been on a rocket ride since last November thanks to its partnerships with the PlayStation 4 and Xbox One. The company says it has over 45 million monthly unique visitors, including 1 million streaming and creating content on the site. Online video and networking firm Qwilt says streams from the site accounted for nearly 44 percent of live-streaming traffic in the U.S. for the week of April 7.

More importantly, the site's visitors don't just stick around for 3-5 minutes. They watch for hours at a time, which makes them extremely valuable to advertisers.

YouTube has been less successful in attracting a gaming audience. The company recently bought a small ownership stake in game video site Machinima, although that site has had its share of troubles and was recently hit with several rounds of layoffs.

Gaming is a crucial component of online video, though. The most subscribed-to YouTube user, in fact, is Sweden's Felix Arvid Ulf Kjelberg, better known as PewDiePie, with over 26 million people keeping up with his gaming exploits.

While live-streamed gaming is an area of weakness for Google and YouTube, Variety reports the parties are gearing up for a potential regulatory fight over the deal since it would make the most powerful online video company even stronger, raising anti-competitive concerns.

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