Twitch and its appeal for Google and Microsoft

The other day, I heard about the rumoured takeover of Twitch by Google for the handsome amount of $1 billion. I have to be honest; up until that point I had never heard about Twitch. Reason enough to look into Twitch and a possible ratio for Google willing to spend such a large amount of cash on this startup:

  1. What is Twitch? – Twitch is a video streaming platform and a community for gamers. Geekwire describes Twitch as “the ESPN of the video game industry” and says Twitch is a leader in that space. Twitch has over 45 million monthly users and about 1 million members who upload videos each month. In a relatively short space of time (Twitch was launched in June 2011), Twitch has successfully created an online streaming platform for video games.
  2. Who use Twitch? – I’m not an avid video gamer myself, but browsing the Twitch website tells me that are in effect two main user roles, which are closely intertwined: game players and broadcasters. Clearly, you can be both and I’m sure that a lot of Twitch members fulfil both roles. One can play games on Twitch channels like Counter-Strike: Global Offensive or World of Tanks or one can create their own pages from which you can broadcast games. A great example of Twitch’s success in engaging its community around a game is TwitchPlaysPokemon which has had over 78,000 people playing a game that turns chat comments into controller inputs, parsing hundreds of thousands of ups, downs, and starts and translating them into in-game movements.
  3. Why is Twitch such an interesting acquisition target? – Twitch is reported to have snubbed Microsoft’s takeover offer but is rumoured to have fallen for Google. This raises the question as to what makes Twitch such an interesting takeover target? I think that the answer can be split into two main factors. Firstly, scale. Twitch has a rapidly growing and very engaged user community who all share a passion for (video) gaming. Secondly, live broadcasting. Going back to the example of TwitchPlaysPokemon, Twitch streams games that get people excited and gets them participating in real-time. This simultaneous element is something that for instance YouTube is lacking. YouTube is great for on-demand video content, but (currently) less so for live event coverage or participation. The combination of both factors (as well as a very rich vein of user generated content and data) makes Twitch an extremely interesting target indeed.

Main learning point: Recently there have been some major takeover deals in the digital industry – think Instagram, WhatsApp and Beats – but the rumoured acquisition of Twitch by Google is interesting for a number of reasons. If I have to highlight one key reason, then synergy is the main aspect that makes this potential takeover sound like a very exciting one. How will Google potentially integrate YouTube and Twitch or at least find a way to combine both platforms? Will the acquisition of Twitch help YouTube in cracking the real-time broadcast element of its offering? Lets wait and see if the deal actually gets done in the first place, but if it does then I will definitely keep an eye out for any future developments involving Google, YouTube and Twitch.

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The main reasons behind Google’s acquisition of Motorola Mobility

On Monday, Google announced that it had acquired Motorola Mobility, the handset development arm of the telecommunications company for a price of $12.5 billion (£7.5 billion). Google was quick to assure the public that Motorola will be run as a separate division to Android. One of the main drivers of the success of Android is the open nature of its platform, which will not be affected by this acquisition and which will continue to serve as the sole operating system for all of Motorola’s smartphones. Larry Page, Google’s co-founder and CEO, commented on the acquisition that “together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere.”

I’ve spent a bit of time trying to get a better understanding of the main reasons for this deal and the key benefits expected by Google. This is a brief summary of the main things I found:

  1. Patents! (part 1) – Motorola has a portfolio of 17,000 patents which Google will now be able to license to other Android users like HTC and Sony. In addition, Motorola has 7,500 pending patents. This newly acquired patent portfolio could help Google in significantly expanding (and protecting) the capabilities of its Android platform.
  2. Patents! (part 2) – Probably the most vital reason for this acquisition is the protection Motorola’s patent portfolio should offer Android against future legal action from the likes of Apple and Microsoft. Android has already been subjected to a multibillion dollar lawsuit by Oracle and is facing ‘indirect’ legal challenges through the complaints brought by Apple against Android device makers including HTC and Samsung. Having an extensive patent portfolio in place should help to better protect Android in future.
  3. New commercial channels to explore – Google will also gain a new and valuable channel into users’ living rooms through Motorola Mobility’s profitable set-top box business, which makes receivers for cable TV operators.
  4. Vertical integration – In an attempt to learn from the best (i.e. Apple) this acquisition is also meant as a way to integrate vertically, with Google hoping to “supercharge” its future Android releases through seamlessly merging its hardware and software.
Main learning point: out of all the key reasons for the Motorola acquisition that I learned about, I feel that “patent” is the magic word here. Given that Android as a business is still in its infancy (it’s only been around for three years) it has to play catch-up when it comes to patent protection. Earlier this year, Google lost out to its direct competitors RIM and Apple in an auction of valuable Nortel patents and patent applications. Had it won this auction, it would have been like getting access to the holy grail for Google. With this recent acquisition of Motorola Mobile, Google is hoping to be better armed in the ‘intellectual property war’ that seems to have been sparked by its direct competitors.


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Social search: adding a ‘personal’ element to searching

Searching through Google has become completely ingrained in the way we look for information online. It provides search results based on a search term entered by the user. However, big search engine rival Bing and Facebook have recently tied up to create “social search”.

In a nutshell, this means that Bing will add “social signals”, based on people’s “Likes” on Facebook, to its search results. Users (provided they’re signed in on Facebook) will have the option of filtering search results by what their friends have “liked” on Facebook. For instance, when I search for “Dutch pancake places in London”, I will be able to see those restaurants “liked” by my Facebook friends. It’s a good way of ‘personalising’ my search results since a good number of my Dutch friends are likely to know a thing or two about pancakes.

Similarly, with the new “Profile Search”, Bing will return search results that have a greater “social proximity” to the user. Typically, when I search for “Pete Smith” in Google, I’ll get about 7 million results. With Bing’s new Profile Search, the results will have been filtered to show my Facebook friends and my friends’ friends, thus increasing the likelihood that I end with the Pete Smith I was looking for.

This new search functionality will kick in if Facebook users are logged into Facebook when they reach Bing or when they have “cookies” of data storing their basic Facebook information on their PCs or other devices. As a result, even when you’re not signed in (but have not unchecked the “keep me logged in” box) other users can still search Bing using your social graph. I can well imagine that this might lead to embarrassing situations in certain cases …

Even though I haven’t had a chance to test the new search functionality myself (Bing is looking for a UK release later this year), these are the things I’ve learned thus far:

  1. “Social search” adds a whole new dimension to search – It makes search results much more personal and relevant.
  2. The tie-in with Facebook sounds promising – Even though it’s early stages, this functionality has the potential to be extremely beneficial, both to users and brands.
  3. More privacy related issues are looming – With people becoming increasingly aware that an ‘online identity’ can be hard to shake off, the same goes for search results surfacing all kinds of personal information and content.

Main learning point: this link-up between Facebook and Bing introduces a new, exciting element to search. The ability to personalise one’s search results looks to become an important driver for search in the future. Some initial bugs still need to be ironed out, but I can imagine that future iterations of social search will revolutionise the way we search.

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Windows Phone 7: Microsoft mobile goes user-led!

Can Microsoft reverse its mobile fortunes? This week I learned about the launch of the new Windows Phone 7 operating system to be implemented into mobile devices by manufacturers such as HTC and Samsung. Where Microsoft’s previous operating systems were seen as aged and not particularly user-friendly, Windows Phone 7 seems to be breaking with old habits. “A butterfly coming out of a caterpillar” was probably the best description that I came across. The consistent theme of all reviews thus far is that the new mobile operating system is much more user-friendly and intuitive than any of its (Microsoft) predecessors.

I feel that the main things that stand out from the Windows Phone 7 operating system are:

  1. A simple touchscreen – Only a few buttons and no complicated buttons.
  2. A dedicated “search” button – Search made easier and more intuitive.
  3. ‘Live tiles’ – Square blocks that provide quick and easy access to the phone’s main functions.
  4. No static icons – The icons can be easily customised e.g. to show new email messages (both corporate and webmail!) or Facebook posts.
  5. Tight integration with Microsoft Office Mobile suite – Easy access to e.g. Outlook and Word applications.

Main learning point: the iPhone might have just found itself a true competitor in Windows Phone 7. This new operating system looks promising in its simple looking user interface and integration with a range of Microsoft Office applications. It will be interesting to see whether developers will jump on the chance to create bespoke apps for Phone 7 handsets. At the moment, Windows Phone 7’s prospects are looking very bright as it seems like Microsoft got its mobile proposition right for the very first time!

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