Prior to yesterday's announcement that Amazon had purchased Twitch, the prevailing rumor was that Google was going to snap up the video streaming service for over $1 billion. Variety and GamesBeat used strong words like "confirmed" and cited what they deemed to be "reliable sources" close to the deal, indicating that Google's acquisition of Twitch was a lock. Except it wasn't. So if Google was interested in snapping up Twitch, then why did it back away from the deal?
According to Forbes, Google walked away from the deal because it was deeply "concerned that about potential antitrust issues that could have come with the acquisition." Management apparently felt that buying Twitch might trigger an anti-trust investigation because they own YouTube – a competitor to Twitch (thanks to the integration of Google Plus streaming). One source cited by Forbes said that – because of these concerns – Google and Twitch could not come to an agreement "on the size of a potential breakup fee in case the deal did not go through."
According to what Bessemer Ventures Partners’ Ethan Kurzweil tells Forbes, the Google-Twitch deal was far from complete, contrary to what was being reported. Kurzweil led his firm’s investment in Twitch and sits on the company's board. Kurzweil also said that there were other suitors involved after Twitch talked with Google. Kurzweil and fellow BVP member David Cowan explored other possibilities and hired Silicon Valley banker Frank Quattrone of Qatalyst Partners to open up acquisition talks with several other companies.
The rest, as they say, is in the history books. Amazon announced the purchase of Twitch for $970 million.
Twitch and Google never publicly confirmed that they were in acquisition talks.
Source: Forbes by way of Andrew Eisen