Google Inc.’s share price up, starts acquisition talks with Twitch to add more users and expand reach of YouTube

As revealed by a person familiar with the process, Google Inc. and Twitch Interactive Inc. have held talks over the acquisition of the latter by the technology giant, which is trying to expand the reach of its YouTube website. Google Inc. is considered to be able to add more than 45 million active users on a monthly basis if the deal between the two companies is closed.

Twitch Interactive Inc. is currently a fast-growing, live video-streaming service. Its is also available on PlayStation 4 of Sony Corp. and Xbox One of Microsoft Corp. However, according to one of the people familiar with the issues, the company has been considering a variety of options and would prefer raising additional funding instead of selling its assets. According to Qwilt, which is an online video and networking company, Twitch generated about 44% of the live-streaming traffic by volume in the US in the week ended April 7th.

An eventual acquisition of Twitch by Google Inc. would be unique because of several reasons. Unlike other similar services, Twitch is not considered a “multi-channel network”. The service is more similar to Googles YouTube, which is even more of a good reason for the company to seek consolidation by acquiring it.

In addition, Google would benefit from the large number of active monthly subscribers and Twitchs potential to sell premium video ads. Recently, the tech giant has been seeking to make its services better and attract more users with a variety of services, which made it to concentrate on acquisitions. In February this year, the company purchased Nest Labs Inc. in a deal that amounted to 3.2 billion dollars. It has also made several smaller acquisitions over the past couple of weeks, including the purchase of Stackdriver Inc. and Adometry Inc.

Google Inc. was 1.99% up to close at 538.83 per share yesterday, marking a one-year change of +18.42%. According to the information published on CNN Money, the 42 analysts offering 12-month price forecasts for Google Inc. have a median target of 662.50, with a high estimate of 750.00 and a low estimate of 525.00. The median estimate represents a +22.95% increase from the last price of 538.83.