Mergers and Acquisitions Monday - Twitch.tv + Google and DirecTV + AT&T

Looks like 2014 is the year of mass consolidation. It's good to be a rich old bastard these days.

Today relative to the industry here, we have Twitch.tv looking to sell out to Google for $1 billion.  Twitch.tv does game streaming.

The biggie, AT&T is offering $48.5 billion for DirecTV.  In part of sweetening the regulatory hurdles, AT&T is offering to sell it's investment interest in America Movil, the Mexico-based super telecom company.

and... elsewhere RackSpace has hired a big mergers and acquisition super power who is friendly with IBM.   Is Rackspace setting itself up for a sellout to IBM?

One day there will be only one big corporation called BnL and we all will be slaves.

Wow

Nice to know that DirecTV is worth 48.5 Twitch.tvs

When I graced the halls of Rackspace, I felt like they were polishing up to be sold, and that was about 4-5 years ago or so now. From what I saw interviewing in 2010, it was different than it was when I interviewed with them in 2005-06 -- the managers were more military style, instead of black shirt/jeans and long hair sys admin type folks and geeky types that I am familiar with. The engineers had also changed, as they were either "yes" men who did the job but didn't really "know" much and were green, or someone who had been drinking too much of the rackspace punch and was just trying to slide into a lead/management position. At this point, I am sure they are wondering where they exist in the market -- they had a descent base at one time in history with dedicated servers and managed systems, later virtual machines, but I am sure that AMZ/Linode/DO/etc have taken their share of customers from them. IBM would probably acquire them if the price is right, as they are just dying to be more in the "cloud" these days with a reliable service; I used an offering they had out of Poughkeepise NY, and to be fair, it was a beta, but it was horrible. The network was slow from a majority of places, the machines were super slow to create, and not snappy running either. IBM has probably realized they can use all the money they saved from cutting benefits and pensions of retired IBMers, outsourcing as much as possible, not hiring employee's, but instead hiring contractors for years on a much lower pay scale, and selling lots of their brands off to the highest bidder. I wish the two of them luck -- no thanks.

$$$$$$$$$$$$$ whoever has it, enjoy it. 

IBM would probably acquire them if the price is right, as they are just dying to be more in the "cloud" these days with a reliable service;

Click to expand...

IBM paid $2 billion for a reliable cloud services provider named Softlayer last June but their marketshare is still nowhere close to Amazon.  Rackspace currently has a market cap of $5 billion so IBM is probably one of the few cloud players who could afford to acquire them.

TruvisT said:

One day there will be only one big corporation called BnL and we all will be slaves.

Click to expand...

Who will be owned by Chinese government.

Someone explain to me how Twitch is worth 1 Billion dollars

texteditor said:

Someone explain to me how Twitch is worth 1 Billion dollars

Click to expand...

Advertisements, Subscription membership fees (it's like 6/month just to subscribe to one person (or I think the price is set per person?), so if you have multiple people you like to subscribe to you have to pay the cost each time), and just Twitch having such a major ownership of the Livestreaming market.  

It's pretty significant in the grand scheme of things.  

HalfEatenPie said:

Advertisements, Subscription membership fees (it's like 6/month just to subscribe to one person (or I think the price is set per person?), so if you have multiple people you like to subscribe to you have to pay the cost each time), and just Twitch having such a major ownership of the Livestreaming market.  

It's pretty significant in the grand scheme of things.  

Click to expand...

$4.99/m to subscribe to an individual channel. Half of that is the streamer's revenue. In some cases, such as Athene, a larger percentage of the revenue from the Sub button could go to the channel owner. Some "event pages" have a larger sub cost, but that's almost always associated with a tournament and is a one-off fee for that specific event, rather than a recurring amount per month that the subs keep to support the channel.

There is also the TURBO option, which is like $15/m to get no commercials on their full site or something like that (and the streamer still gets paid as if you saw an ad but you didn't).

I'd say the valuation is more in line with the existing platform, less so with revenue itself. Youtube Streaming sort of sucks ass, twitch doesn't (as much. chat servers still blow chunks). Revenue from advertisements themselves have dropped quite dramatically over the last 12-18 months, and what used to be a hard feature to get for a channel (sub button) is now the norm at very low stream viewership numbers.

SkylarM said:

$4.99/m to subscribe to an individual channel. Half of that is the streamer's revenue. In some cases, such as Athene, a larger percentage of the revenue from the Sub button could go to the channel owner. Some "event pages" have a larger sub cost, but that's almost always associated with a tournament and is a one-off fee for that specific event, rather than a recurring amount per month that the subs keep to support the channel.

There is also the TURBO option, which is like $15/m to get no commercials on their full site or something like that (and the streamer still gets paid as if you saw an ad but you didn't).

I'd say the valuation is more in line with the existing platform, less so with revenue itself. Youtube Streaming sort of sucks ass, twitch doesn't (as much. chat servers still blow chunks). Revenue from advertisements themselves have dropped quite dramatically over the last 12-18 months, and what used to be a hard feature to get for a channel (sub button) is now the norm at very low stream viewership numbers.

Click to expand...

Haha well I didn't know to that extent but I did know that Twitch in itself was a ridiculously popular platform in general for streaming especially with the chatting service on the side.

Good call. 

You forgot about Beats >> Apple and Motorola >> Lenovo


Edit: though the Beats and Twitch acquisitions are all rumors.