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Google’s $1B purchase of Twitch confirmed (venturebeat.com)
237 points by owenwil 824 days ago | hide | past | web | 96 comments | favorite

Assuming this is all true (the article is sourced poorly): Justin and team very much congratulated, that was a long road from justin.tv to twitch.tv and now an exit of this magnitude.

Hard-won, very much deserved, also a case study for a successful pivot.

" We do know that Twitch investors who participated in past rounds are pleased that they will be getting significant returns that are multiple times the amount they originally invested. "

Suggests that it was one of the investors that leaked the story to venturebeat, pretty classless, and really not-done in those circles.

This was leaked about a month ago. Maybe 2.

Twitch really is a phenomenon. There's such a diverse community of game streamers that I can't help but expect someone to enter this space to compete soon. There are millions of viewers, and some shows are super niche. Take for example TheMexicanRunner http://www.twitch.tv/themexicanrunner who is working his way through beating every North American NES game. Sounds impossible, but he's the guy that could do it. Elsewhere, people like Lirik and Sheever have become famous and make a living off of their broadcasting now. Quite an ecosystem!

I've heard lots of concern in the community about this acquisition since many of the streamers also have youtube channels that got hit during the recent overzealous copyright nonsense that happened on youtube. Since Twitch is basically "violating" copyright in the same way they got beat up for on youtube, it wouldn't make sense for Google not to do the same with twitch, but then of course it would gut the service.

I totally missed it, I was very much occupied at the time.

What made me especially interested in the whole twitch phenomenon is that we always threw out the gamers because it wasn't 'real' content, totally missing out on the opportunity :)

More power to them though for identifying the niche and running with it.

The rising interest on e-sports (the recent DOTA2 tournament had 11 millions prize pool) is another market that they were able to tap quite well.

Games are serious business.

> very much deserved

Does anyone actually deserve $1,000,000,000? (I know it's shared between investors but assuming he got a chunk of that)

Good question. Ask the billionaires. Then ask the rest of the world.

Some country in Scandinavia (Denmark?) at some point had a 100%+ tax rate, which meant that if you earned more than some ridiculous amount of money you lost more than you made.

I think any amount of money over and beyond what you need to live in whatever is considered luxury in the place where you live is probably wasted on you. But I guess for people at that level it's a way to keep score.

As far as Justin and Co having deserved this, they worked harder than most people ever will (especially in the early days), they have been diluted substantially and they'll be paying a fair amount of their take in taxes.

For the longest time it looked like the whole thing could still fold up and this deal is a gigantic pay-out compared to many other acquisitions. Even so, I think they really did build something of actual value, as opposed to some other recent acquisitions (far higher ones than this one) that I fail to see any value at all in. So as far as I'm concerned they deserve some kind of pay-out, and since we're living in a capitalist society that is defined as 'what the market will bear'. In this case that appears to be $1B. So good for them. Wished I had not banned those gamers ;).

In the 1970s, Sweden briefly had a glitch in the tax system where the self-employed paid 20% plus income taxes of up to 87%, for a net of 107% if you were self-employed, filthy rich and stupid enough to declare it in Sweden -- not a common combo (rest assured the IKEA or Tetra-Pak guys weren't paying 107%!). But this was not the intention, and it was long since fixed.


> As far as Justin and Co having deserved this, they worked harder than most people ever will

When you say this, you mean harder than other people in western based office work?

Sorry not trying to pick on you, you seem reasonable and decent! I just think it's a shame that bestowing incomprehensible amounts of wealth on individuals should be celebrated as a deserved reward. Hard work = lots of rewards is not the reality for the majority of the world.

I agree they deserve a payout of course, that level of wealth just feels wrong to me, like everything feels a bit out of whack. And I know myself I would of course probably keep the majority of it as well.

I tend to compare this to my mom, which keeps me on the humble side of things. She worked really hard her whole life long and does not have much to show for it. She supported me and my siblings whenever we needed it. When I was 21 and sold my first company I realized I had just made more money in a year than my mom made in 10. That was a really weird feeling.

So I'm well aware of the fact that 'deserved' is a pretty elastic concept. But if you want to start that discussion then you should pick up the Forbes list of billionaires and start petitioning them to abandon the capitalist way, they are most likely as much or more 'not deserving' of their wealth as the people that put together twitch.

I've got a very healthy respect for people that do regular work, farmers, masoners, lathe operators, millwrights, mailmen and so on, if only because I tried my hand at all those professions at some point in my checkered past and have found that each and every one of those takes tremendous dedication and skill to perform with any amount of success. And yet, barring lucky accidents very few people in those professions will ever be wealthy.

It's an unfair world we live in, but that does not stop me from congratulating those that achieve a certain level of success if they played this particular game by the rules that they themselves did not set. That it is possible to envision a better world in which the wealth could be spread better does not detract from their achievement.

I agree they deserve a payout of course, that level of wealth just feels wrong to me, like everything feels a bit out of whack.



It doesn't seem like market efficiency was the central thesis of the essay. He was saying that countries which don't allow their citizens to get rich are worse countries to live in. That's empirically true. Based on that observation, he argues that income variation is actually a sign of health. None of that relies on efficient markets.

Most "highly valued" startups usually disappear in thin air once founders get their payouts as if they had never existed (ahm... Viaweb?).

Viaweb was designed to be sold. Pg didn't want to work on online stores the rest of his life. But it went on to become a profitable part of Yahoo. That seems like a win-win for both Yahoo and the Viaweb team.

now you can argue founders are 100X better in skills to exploit market and make believe everyone that their goods are far more worth than it actually is. Should they be paid 100X for these skills? If you think of benefit to the human kind as a whole, perhaps not.

If someone paid the founders a certain amount of money for those skills, then those skills were worth that amount of money.

What does it mean to "benefit humankind as a whole"? That presupposes humankind has a purpose. Who gets to decide how much benefit something has to humankind? It seems like the answer is "the market."

Not too long ago I read a thing I ruminate on every now and then:

    I love getting paid, do whatever you can do to get paid, but do not 
    let the money whisper to you that you are worth it, it will be 
    lying and you will believe it.
But that's just wankery over "deserving". I can still say good on them for getting theirs in an f-you-I-got-mine world.

If your business has improved the lives of tens of millions of people, which Twitch has, I think you do deserve to become a billionaire or multi millionaire. I figure the rewards for a business are relative to the number of people it impacts.

Assuming founders were working on this for past 10 years straight, 16 hours every single day without taking any vacations or weekend days off whatsoever, their pay rate would have been $1,700 every hour assuming they receive only 10% of this pie each. Well deserved for all the "risks" they took to avoid regular jobs, eat ramen everyday or innovations they contributed to the advancement of mankind? Multi-Billionaires typically make equivalent of $100,000 every single hour. I often joke that Paul Allen charged Microsoft shareholders $10,000 per character for the code he wrote. Next time when you type if in your program, take a breath and think what if someone paid 20 grands just for doing that. That's how it feels like to get billion dollar payout.

> Assuming founders were working on this for past 10 years straight, 16 hours every single day without taking any vacations or weekend days off whatsoever, their pay rate would have been $1,700 every hour assuming they receive only 10% of this pie each

That's just made up.

> Well deserved for all the "risks" they took to avoid regular jobs, eat ramen everyday

The "risk" of avoiding a regular job is lost wages (I'm stripping away the experience that could get you into a better paying job after a failure here as well). If they could be earning $50k a year, and worked for 10 years on their startup, their risk is $500k. I'm also sure that most people wouldn't go more than a few years without any traction, so you're probably looking at about $150k risk. Deduct any earnings from that risk in that time frame as well ( they need to live) so the personal risk is actually perhaps nearer to ~$100k. I think you are overstating the risk factor here.

Eating ramen every day is something you've made up as well.

> innovations they contributed to the advancement of mankind?

Hyperbole, it's a website that lets you watch people playing computer games. You're vastly overstating it's contribution to the advancement of mankind.

> Suggests that it was one of the investors that leaked the story to venturebeat, pretty classless, and really not-done in those circles.

Who normally leaks this sort of thing? Who would be upset by this? If anything it only makes the other investors look savvy for making a fat return.

> Who normally leaks this sort of thing?

Nobody. If you can't trust your investors to keep their mouth shut about a deal in progress or that is under wraps for reasons important enough to the acquirer and the acquiree then investors follow suit and happily count their money.

Such loose lips can sink deals in the worst cases. Very unprofessional.

Well, if Google wasn't the only one trying to buy Twitch, I'd imagine any losing bidders wouldn't have any problems with someone leaking what they know.

I'll save my congratulations until it becomes clear that they have not sold out the interests of their users. Making a lot of money is not inherently virtuous.

The (forced) merge of my YouTube account with Google account was one of the most painful experiences I've had to undergo and I still suffer from issues and annoyances that has brought about.

I can't be excited about this acquisition because all I can think about is how they are about to slowly and painfully destroy the Twitch experience. What can we expect? Forced merge of Twitch accounts? A forced G+ page for every channel? Some kind of horrible Hangouts integration? Real name policy and its reversal in 3 years? Share this stream with your circles? Pervasive ad infestation? Exceptionally annoying wiggling bell on top right that demands my attention just to let me know that some person I've never heard of has invited me to an event I've never heard of on Google+? A new "clean/functional/consistent" interface that changes often and only gets monotonically worse over time?

>The (forced) merge of my YouTube account with Google account was one of the most painful experiences I've had to undergo and I still suffer from issues and annoyances that has brought about.

I know people bitch(ed) about that but come on, it makes a ton of sense from both Google's and end-user's perspective to standardize all Google services under one account. Anybody (here or elsewhere) would have made the same decision.. Their fault is that they waited as long as they did.

Google+ also makes some sense because it does tie services like GDrive, blogs, photos, docs, videos (youtube), and chat together. The problem there was that they got spooked by Facebook and tried to copy it exactly (e.g. the real name policy, which was always stupid but they did it because facebook did it). It was a typical Microsoft thing to do; look where the puck is, and not where it's going.

Please do any or all of the above. The idiotic Twitch chat spam and moronic memes makes my iq drop every time I see it.

If it integrates well it could be a nod to a different strategy to fight Facebook.

Most of that already happens on Twitch...

"In March, Twitch represented 1.35 percent of all Internet traffic"

Wow, I didn't realize Twitch had that much traffic. That's something to be proud of.

Video will consume bandwidth like there is no tomorrow, and the bigger the percentage of updates on a frame-to-frame basis the larger the bandwidth required. With the resolutions involved that's actually not all that bad.

We came within a hair of being kicked off the net for consuming too much intercontinental bandwidth in the late 90's. The internet was simply not designed with video in mind so it's testimony to how well it has adapted that something like twitch can even exist.

That's slightly misleading because their traffic involves live HD video streams for rather long periods of time. For example, 1000 Twitch users will represent orders of magnitude more traffic than 1000 Facebook users. Another impressive point is since the content is live it's not as easy to CDN like Netflix/YouTube.

It's still a ton of bandwidth. I'm sure they'll be happy no longer having to pay that bill.

And half of that was probably twitch plays pokemon.

that is actually awful.

their ratio of infrastructure cost to revenue will never look good.

Well now that won't be a problem because Google has infinite compute resources.

Is this going to lead to a crack down on playing unlicensed, non-royalty free music on streams?

Probably, but let's be honest here: that was going to happen even if Twitch was never bought.

Don't forget restrictions by location.

Playing music on streams isn't stealing music. If the people listening to the stream like the music they hear, they're likely to try to find out what it is they're listening to and go listen to more of it. That means more music sales, not less.

That's arguably true of a lot of music copyright infringement. I don't think it will stop the lawyers.

But now it becomes a "public performance" and that gets tangly real fast.

where the definition of confirmed = "an anonymous source says to a semi-accurate publication".

That's an improvement over most recent confirmations.

Justin Kan posted something about the deal to his FB account a few months ago.

I am surprised that others concurrents let Google buy it considering it was the only "serious alternative" to some functionalities of youtube.

The monopoly of Google on video streaming is even stronger now

True, but if the price is actually as high as $1B, it means that "other concurrents" at least tried to do something about it!

Monopoly? Do Netflix, Hulu, Amazon and iTunes all not offer streaming products? Not to mention their Asian market equivalents (pptv, tudou, youkou).

Different kind of streaming. Netflix, Hulu, Amazon and iTunes all allow streaming media after it has been recorded. Twitch and YouTube allow streaming media while it's live.

There's a few other services out there that allow this, but not many.

With something like Netflix you can just put up the content in a CDN, compared to a live stream which can be more difficult to manage.

Try and get your cat videos on Netflix, Hulu, Amazon or iTunes. Their "streaming products" of those companies and Google have as much in common as as, say, the "transport products" of Ford and Boeing.

The only site still competing directly with YouTube in the global market is Vimeo, and, well, I doubt Google has much to fear from them.

What about dailymotion?

What's going to happen to people streaming Nintendo Games? Are we going to have another youtube situation?

What's a youtube situation?

He's talking about when Google starting taking down (monetized) video game playthroughs on YouTube out of fear that they infringed copyrights and did not fall under "fair use" since their creators made money.

The video game companies never initiated it, Google did. In fact the companies support playthroughs on YouTube because it helps with sales and builds communities around their games. They even wrote open letters to Google giving them permission to monetize gameplay videos made using their games.

Content takedowns without the DMCA or any sort of due process.

(though, IIRC, Twitch does those already for pre-release game titles through agreements with various game publishers)

Aka "being Googled by Google"

Congrats to team twitch. It was one of the first offices I walked into that made me wish I worked in a place like that. So much energy. So much fun.

Let's imagine the worst case scenario:

Forced Google+ accounts with realnames. Because no-one uses an alias in gaming scene ever.

Automatic Content ID. Oh you played a bit of music even accidentally on background? Blocked.

Oh nintendo wanted to block your game stream (http://www.zeldauniverse.net/2013/05/16/nintendo-cracks-down...).

This game is not available in your country!

I know these are exaggerations. But at least some of them will be eventually implemented. That means it's time to switch services. Anyone know of any good almost as easy to use one?

G+ ditched the real name policy recently: http://en.wikipedia.org/wiki/Nymwars#Expired_Google_policy

I am aware of that. But considering how google has acted in recent years it wouldn't surprise me if they would reinstate that policy and try to force it to everyone because it worked with facebook etc.

Google has this bad habit of deciding something and then forcing it. Real name policy. OpenCL on mobile. The list goes on. If they don't get any traction initially they will at the very least attempt to force it.

Will ycombinator receive anything from this as they initially funded justin.tv (where twitch spun off from)?

I assume they will.

It seems like a similar situation to Soylent- a spinoff of a ycombinator company, that is billed as a ycombinator company.

I was hoping for a Windows Phone Twitch app soon. I guess this kills any chances of it given how they refuse to make a Youtube App and even lawyered up a took down a Microsoft made one over a year ago with no sign of an official app still.

There is no place for Windows Phone in Google's ever expanding empire.

Google's Mission Statement: “To organize the world's information and make it universally accessible and useful.”

They should tack on a ",except on Windows Phone" to that if they wanted to be truthful.

Windows Phone's market share in the U.S. is at 3.4% (and apparently isn't growing)[0]. Supporting your apps on another platform is expensive, so I imagine that Google doesn't support it because the market and users aren't there (relatively speaking). And, of course, Window's Phone users can still visit the mobile YouTube site, which (while I haven't tested it) I imagine supports Windows Phone fine.

If the market share increased significantly, I'd be surprised if they chose to continue not to support it. But for the time being, their decision makes sense to me.

[0]: http://techcrunch.com/2014/07/03/windows-phones-market-share...

Personally on my wp I ever used the youtube site and it works perfectly. I can also have the controls of the streaming with the lockscreen on ( I usually hear some music video from my phone while going to work )

>Supporting your apps on another platform is expensive, so I imagine that Google doesn't support it because the market and users aren't there (relatively speaking)

Nah. It's not that expensive. They want to ignore the Windows market to stick it to Microsoft. The relatively small Windows Phone market makes it possible for them to do that.

To be fair, for what I understand the lawyering up was more about it violating the terms of service and being able to save the videos offline and skip ads. Google can't be expected to support every single native mobile market out there. What is windows phone's market share these days? A few percentage points?

That is still upwards of a 50 million install base. Even Vimeo has had a official app since long, and Microsoft offers to pay for it, so the reasons given by Google don't add up since it's actually hurting the content creators who lose some traffic and ad money from Windows Phone users because of Google's refusal to create an official app with ads. This is clearly about using it's power to take Windows Phone down a notch rather than any financial or rational reasons.

> so the reasons given by Google don't add up

They add up perfectly, though it may be inconvenient for WP users.

You CAN use youtube on WP using the mobile site. You just don't have a native app. They're not denying WP users or content creators anything except a little bit of convenience and battery life.

And as far financial or rational reasons - Microsoft is still extracting patent fees from Android handset makers. It makes a lot of financial sense to hurt them back - so when you come to the negotiation table, you have something to negotiate. Don't you think?

I would agree if they were supporting lots of smaller platforms but just skipping Windows phone. Someone correct me if I am wrong but Google only has serious app support for iOS and Android, correct?

I'm sure Google managers, engineers, and designers are just clamping at the bit to write for a tiny platform.

In reality, if I remember well, Google obliged Microsoft to delete their youtube app because they were not using the html5 public api they give to all devs ( and not respecting the tos the second time). Microsoft answered that at the moment (wp8) they could not use html5 api on their apps without some performance problems and, indeed, you are able to develop native apps with html5/css/js only with the recent 8.1 update.

I think that at this moment Microsoft can again build a youtube app both respecting the TOS and using the html5 public api without performance issues

Google's lack of support for WP is WP's biggest weakness.

I borrowed a Lumina 920 for about a week and really liked it. Well built, cool UI. I especially liked the calender. The lack of native google apps didn't bother me too much. I've got waze to replace gmaps, the lack of a non-sketchy looking gchat app was annoying but that was about it. I can use the services I care through the browser and my email and contacts synced just fine.

The real killer for me was the lack of a keepass app that supports 1.x DBs. If any of y'all are looking for a project, do that! You would have earned my $1!

$1 × how many users? :)


Are you saying that Apple pays Google to keep Google Maps and Gmail on the App Store? Because I don't think that sounds right at all.

They should better support their customers on Windows Phone and Windows 8. On the other hand there are proxy wars all over the place between the tech giants. This is one. Another one is Microsoft being dicks and extracting Android licensing fees.

What's funny is that I have a Motorola Droid from 2009, the same time at which I could have gotten an iPhone 3GS, and the YouTube App is no longer supported on my Droid. I have my mom's old 3GS and the app runs perfectly.

To be pedantic, if Google's goal is to eliminate Windows Phone altogether, then that would be compatible with their mission statement.

I hope at some point down the line this leads to the adoption of streaming VP8/VP9 codecs and using an HTML5 player rather than the resource hog that is Flash.

There's support already for HTTP Live Streaming [1] which, while not really standard, is supported by many platforms. Just append /hls to the channel url and there you go. I guess the only step remaining is for someone to write an HTML5-based HLS viewer. IIRC the main technical barrier here is that <video> does not allow for seamless video switching (which is required for HLS as it adjusts bitrate on the fly).

    [1] http://en.wikipedia.org/wiki/HTTP_Live_Streaming

And I have my fingers crossed for Chromecast support.

In the meantime Lakitu is a nice Twitch client with Chromecast support: https://play.google.com/store/apps/details?id=com.kwd.lakitu

I'm tempted not to believe it since it makes sense to me :-) But more seriously, back when I played WoW I spent many hours watching some of the tougher boss fights on Youtube. Automating that process is a great way to unify those page views. And its a fairly strong 'you are a gamer' signal so probably a more valuable piece of advertising realestate.

"You must be logged into Google+ to view this comment" spam will be returning to twitch chats....

Either way, congrats to the team. As a long time user, I can't help but feel that this will only hurt the twitch.tv experience in the long run though. Maybe the improved stability for other regions will be a large enough benefit to offset any other changes.

the new faux pas will be you streamning a game on twitch and it showing up on your gplus status, which also shows up on your gmail address that your boss happen to have.

Why would that happen? Google specifically opposes "frictionless sharing"[0] (I think that's one of the reasons Google+ doesn't really have a write API - they don't want apps posting "on behalf" of users). And Google+ emphasizes sharing things with the right people using circles. Don't spread FUD.

[0]: http://googleplusplatform.blogspot.co.uk/2013/02/google-plus...

if you only agree to gplus account and does things in google owned services, you are sharing everything without even knowing.

create a new account. agree to gplus. comment on youtube or use hangouts on device X. pronto, it was so frictionless that you didn't even notice. not it is public that you are using device X and that you commented on some youtube video.

what you say may be true for non-google services, which twitch does not fall under anymore.

When commenting on a YouTube video, there is a checkbox where you decide whether to share that comment on Google+ as well [0]. Your choice is sticky - if you uncheck the box and make a comment, then that setting will be remembered and it will never post on Google+ unless you re-enable it. And you can choose whether you want to share that comment with the public or with particular people [1] (I can't think of any other commenting platform that lets you choose specifically who you want to share your comments with on a public page).

Where are you seeing which device you are using shared on Google+? The only place I've seen something like that is if you have someone you've accepted as a Hangouts chat buddy and you've opted into the "share which device I'm on" in the Hangouts settings (all that shows though is if you're on a tablet, phone, or desktop computer though, not specifically which device).

[0]: http://i.imgur.com/H9nHctO.png

[1]: http://i.imgur.com/YtnpjEb.png

yeah google employer, go check in your code repository history

1. how long my mentioned comment on you tube (for example) is tied to gplus

2. when that checkbox was added.

you will surely see its at least a six month difference or more. now some doesnt even have that option yet... but hopefully you will get the point with just example

So your boss is some kind of person who does not want to accept that you're human and have a life outside of the work place?

I'd quit that job. Instantly.

Sweet. That's another website on which I'll be fighting Google Accounts.

Also know as yet-another-google-account-for-spam.

google fought so well the spam on gmail, and then they become the spam equivalent.

i have one gaccount for main gmail, one for gtalk (dead), one for commenting on youtube annoymously, one for gvoice, one to have a different handle when on the phone (because circles do not work as promissed and I want to restrict people that can bug me while i'm mobile)...

all because they can't handle leaving the services work isolated by default.

of course that is good to them, because now they can say "7 new users for gplus! our product is awesome!"

>all because they can't handle leaving the services work isolated by default.

... because that makes no sense. First, because they want to build a cohesive and comprehensive service platform. Second, because a lot of users would prefer to have these services tied together. So what's left, either try to please everyone and complicate the service or provide a common vision for the platform. I think it's obvious that they would go for the latter.

Having said that, they did fuck up in places. Real name policy was stupid. Like I wrote in another post, their great sin was trying to make Google+ a facebook clone, as opposed to a unifying system for gchat, search, youtube, gdrive, gmail, photos, and blogs.

>i have one gaccount for main gmail, one for gtalk (dead), one for commenting on youtube annoymously, one for gvoice, one to have a different handle when on the phone (because circles do not work as promissed and I want to restrict people that can bug me while i'm mobile).

There you go. This kind of insanity is always an option to the insane. What's the difference between this, and 'services isolated by default'?

if they didn't force me to post all my youtube comments, app downloads and android game achievements under my real name googleplus I would probably only have one convenient google account.

it is the same with amazon. I don't want to have the same account that i have with 1-click purchase powers on every dumb and insecure TV (that even sends back to LG my files names, who knows about what i type?) just so i can watch amazon prime videos.

As expected there's a ton of negativity towards Google in the comments here. Congrats to the Twitch team and I hope that Google and Twitch do some interesting things with this acquisition.

I'm imagining that within a few months Google will buy the twitch.com domain name.

Congrats to the Twitch team!

Great, twitch is fucked.

Maybe Google can fix Twitch not working in 32-bit Chrome on Linux now. Or better yet, introduce HTML5 video.


that was probably to drive the price down.

oh, you want that in money and not stocks? sorry, it does not work on chrome anymore.


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