Just married: Twitch gets hitched to Google’s YouTube in $1 billion deal

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We’ve heard of a possible Twitch-Google marriage in the works for some weeks now, but today, the two got married. Twitch agreed to be bought by Google for $1 billion (all cash), an amount that pinpoints the importance of Twitch but doesn’t necessarily match what some tech analysts think Google should’ve paid for it.

There were a number of potential suitors (Microsoft included) that were certainly interested in buying the largest video gaming website company in the world, but Twitch said, “I do†to Google because of its infrastructure, not to mention the fact that YouTube is one of the most popular gaming and video-sharing mediums on the Web. No matter the content, if it ends up on YouTube, it’s bound to make waves. Twitch decided to go with Google’s YouTube because it wants its game live streaming business to grow – a goal that only YouTube could meet, out of the potential buyers list.

Microsoft wasn’t alone in wanting to acquire the company, but Twitch’s conflict with being available on both Microsoft’s Xbox and Sony’s PlayStation devices is a conflict that couldn’t have been resolved if either were selected as the buyer.

YouTube itself gets 6 billion hours of video watching each month, although the site hasn’t been successful at livestream video. The acquisition will now allow gamers to have a one-stop shop for their game streaming content and practice, but Twitch’s own Twitch Plays Pokemon game as well as streaming Nintendo video games with unlicensed background music, as many Twitch gamers are wont to do, won’t fly with Google.

Since Google acquired YouTube, the Mountain View Company’s shut down a number of shows that were viewed on YouTube without consent from their copyright owners. It’s likely that a number of videos on Twitch will become shut off from viewers once Google assumes ownership.

It could also be the case that Google could take over Twitch and force to become a part of Google. IDC Research Manager Lewis Ward thinks that, given Google’s track record, however, Twitch will operate independently. “Google tends to have a much decentralized structure. The acquisitions that they make – it typically isn’t the case that they suddenly bring in new managerial layers to start telling the company what to do. Google seems very comfortable focusing on solving the problems of its subsidiaries – even losing money in the process – with the assumption that if it gets enough eyeballs, then some business model will end up working itself out.â€

While this is true, it’s also the case that Google exercises some power to abandon projects that don’t come out on the “plus†side of the dollar or meet Google’s own goals. Social networking site Google+ wasn’t financially lucrative, so Google decided to kill the independent project (and Google+ head Vic Gundotra stepped down as a result). Google purchased Motorola Mobility about two years ago, then decided to release Motorola within the last few months to worldwide PC manufacturer Lenovo because Motorola was bleeding cash from Google’s reservoir.