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YouTube to Acquire Streaming Service Twitch for $1 Billion

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Google's video streaming service YouTube has reached an agreement to acquire the popular video game streaming website Twitch in a deal reportedly worth more than $1 billion. The deal is part of YouTube's increasing emphasis in live video.

According to Variety, the all-cash offer is expected to be officially announced soon. If it comes to fruition, the acquisition will be the largest in the history of YouTube since the company was acquired by Google in 2006.

Based in San Francisco, Twitch allows users to stream and monetize video game content, with revenue from advertisements and subscriptions to individual channels. The company reports more than 45 million users with more than a million active streamers uploading videos each month, as well as distribution deals for content produced by partners such as CBS Interactive’s GameSpot. While perhaps a niche market, Twitch generates 1.8% of peak US internet traffic, coming in ahead of sites like Hulu, Facebook, Valve, and Amazon, among others.

Twitch is a central component to the growing world of professional competitive video gaming, or 'e-sports.' While the appellation of a sport might be a matter of some debate, the growing popularity of this market is not and one live tournament, the World Championship Final for Riot Games' “League of Legends" sold out the Staples Center in Los Angeles last October in about an hour.

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