Google’s YouTube has reached a preliminary deal to buy Twitch, a popular videogame-streaming company, for more than $1 billion, according to sources familiar with the pact. 
 
 The deal, in an all-cash offer, is expected to be announced imminently, sources said. If completed the acquisition would be the most significant in the history of YouTube, which Google acquired in 2006 for $1.65 billion. The impending acquisition comes after longtime Google ad exec Susan Wojcicki was named CEO of YouTube earlier this year. 
 
 Reps for YouTube and Twitch declined to comment. 
 
 SEE ALSO: Why Google Wants to Hitch Twitch and YouTube 
 
 San Francisco-based Twitch lets users upload and watch free, live gameplay videos that can be streamed from Microsoft Xbox One and Sony PlayStation 4 consoles, and also sells a $9 monthly ad-free subscription and subscriptions to individual channels for about $5 per month. The company claims to have more than 45 million monthly users, with more than 1 million members who upload videos each month. It also has deals to distribute shows from partners including CBS Interactive’s GameSpot, Joystiq and Destructoid. 
 
 YouTube is preparing for U.S. regulators to challenge the Twitch deal, according to sources. YouTube is far and away the No. 1 platform for Internet video, serving more than 6 billion hours of video per month to 1 billion users worldwide, and the company expects the Justice Department to take a hard look at whether buying Twitch raises anticompetitive issues in the online-video market. 
 
 Twitch was launched in June 2011 by Justin Kan and Emmett Shear, co-founders of Justin.tv, one of the first websites to host livestreaming user-generated video. Shear currently serves as CEO of Twitch. 
 
 Founded in 2011, the startup has raised about $35 million in funding. Investors include Bessemer Venture Partners, Alsop Louie Partners, WestSummit Capital, Take-Two Interactive Software, Thrive Capital and Draper Associates. Twitch Interactive, which includes Justin.tv, has about 130 employees. 
 
 SEE ALSO: Major League Gaming, Twitch Compete to Become the ESPN of Videogames 
 
 Gameplay videos already are a highly popular category on YouTube. Twitch also plays in the separate “e-sports” market covering live professional gaming competitions; others in that space include tournament organizer Major League Gaming, a New York-based company whose investors include Oak Investment Partners and Relativity Media CEO Ryan Kavanaugh. 
 
 In March 2014, Twitch represented 1.35% of all downstream bandwidth on North American fixed-access broadband networks — nearly triple from last fall, according to bandwidth-equipment company Sandvine. ||||| Twitch specializes in live videos of people playing games, including regular Joes blasting away in Call of Duty, a popular shooting game, and elite players who earn million-dollar payouts at professional game tournaments. Twitch viewers typically see the screen of a broadcaster, featuring the game being played, along with a video feed of the player’s face and a chat window so they can communicate with the player and others watching the action. 
 
 Advertisement Continue reading the main story 
 
 The site has attracted enough viewers to put it among 15 most-trafficked websites around the world, according to data compiled by Sandvine, an Internet networking company. Twitch viewers flock to the site to improve their gaming skills by watching people who have mastered a game or just to get a closer look at games before buying them. Some of the biggest followings on Twitch are of people who are simply amusing, rather than the best players. 
 
 Gamers can transmit games over Twitch by using PCs along with consoles like the PlayStation 4 and Xbox One. Twitch says that people watch more than 16 billion minutes of its videos each month. More than 1.1 million unique broadcasters use Twitch to stream video. 
 
 Photo 
 
 The company shares advertising revenue with people who broadcast over its service. While the audiences for many broadcasters are so small they make little money, some broadcasters are said to earn over six figures a year. 
 
 Advertisement Continue reading the main story 
 
 The service has dovetailed with the rise of e-sports, as professional gaming is often called. Twitch broadcasts the action from live tournaments for big games like League of Legends and Dota 2. Professional gamers also use Twitch to let spectators watch their practices, inviting them to ask questions about playing techniques. 
 
 “Before Twitch, gaming was something you did in the basement in the glow of your monitor,” said David Cowan, a venture capitalist with Bessemer Venture Partners, a big investor in Twitch. “Now it’s something you can do in groups with hundreds and thousands of people.” 
 
 Advertisement Continue reading the main story 
 
 It is not clear exactly how Amazon intends to fit Twitch into its eclectic and ever-expanding portfolio of businesses. It could help accelerate the company’s advertising ambitions by giving it a huge video network to pump commercials through. This year, Amazon ad revenue is expected to jump 40 percent, to over $1 billion, according to estimates from eMarketer, a technology research firm. 
 
 At Peak Hours, Twitch’s Viewership Rivals Some Cable Networks Average prime–time viewers for selected networks, and average Twitch viewers during its peak hours, from Aug. 11 to 17. Twitch 567k MTV 560k Comedy Central 573k MSNBC 607k CNN 750k Twitch 567k MTV 560k Comedy Central 573k MSNBC 607k CNN 750k 
 
 Amazon plans to let Twitch operate independently, out of its offices in San Francisco, according to Emmett Shear, Twitch’s chief executive. The deal includes stock Amazon is paying to retain Twitch employees and $970 million in cash, said a person briefed on the terms of the deal. 
 
 Advertisement Continue reading the main story 
 
 For months, Amazon has been in a nasty public feud with the Hachette Book Group over the pricing of that publisher’s e-books, showing just how important unfettered access to digital content is to the company’s ambitions. Amazon has started to invest heavily in developing original television shows and movies, and even to develop games of its own, all of them accessible to a growing array of devices, including an Amazon smartphone, television set-top box and tablets. 
 
 Advertisement Continue reading the main story 
 
 “We’re heavily invested in games already,” Mike Frazzini, vice president for Amazon games, said in an interview. “We have a healthy business selling games to customers.” 
 
 Advertisement Continue reading the main story 
 
 James McQuivey, an analyst at Forrester Research, said the Hachette dispute had shown that Amazon needed to invest more in content that it can control. “It puts them into a vulnerable position where they need to make sure they have hours and hours of stuff to pump into these devices,” Mr. McQuivey said. 
 
 But Amazon could also face pricing disputes with game publishers, since Twitch has agreements with major game makers that allow it to broadcast content from their games. 
 
 Advertisement Continue reading the main story 
 
 Some publishers, though, are interested in more lucrative deals with Twitch than the ones they have now. One such publisher, Activision Blizzard, which owns the games Hearthstone and Call of Duty, is unlikely to continue its current business arrangement with Twitch, according to a person briefed on the company’s thinking, who spoke on the condition of anonymity because the discussions were private. 
 
 Twitch “loves Blizzard’s games,” Mr. Shear said, and the company wants to help Blizzard make more money from the site. 
 
 “It’s a huge marketing value for them,” he said. 
 
 Mr. Shear said that the site also provided a community meeting place — recalling an old ritual, when gamers would crowd one another in arcades. 
 
 “What Twitch supports isn’t even new — it’s old,” he said. “But what’s new, that showed up in the past few years, is the entire online community can participate en masse in this kind of full interactive experience.”
– YouTube is on the verge of a $1 billion-plus deal to buy Twitch, sources tell Variety. If you're not nerdy enough to know, Twitch is a popular destination for video game fans, where top players (or anyone, really) stream video of their play sessions. The company boasts that it has more than 45 million monthly users, more than 1 million of whom stream content. During one week in April, it accounted for 44% of all US streaming traffic, according to Qwilt. Just how close the deal is to done is unclear; Variety says it "is expected to be announced imminently," but the Wall Street Journal characterizes talks as "at an early stage." YouTube is bracing for anti-trust objections, given how large its lead already is in the online video space. The Google unit has more than 1 billion monthly users, but its streaming service, YouTube Live, actually lags behind Twitch. Basically, Twitch users are engaged, while YouTube's aren't, a Qilt VP says, "and engagement is what drives advertising."