May 19--Today: Google buys an enterprise mobile-management company, but reports suggest it has a bigger acquisition target in video game-streaming service Twitch. Also: GoPro officially files for initial public offering.
The Lead: Google adds Divide, Twitch reportedly next on shopping list
Google continued its buying spree Monday, confirming the purchase of an enterprise startup, but its biggest target is reportedly still in the works: Video game-streaming service Twitch.
The Mountain View search giant's completed acquisition is for a New York startup called Divide, which offers businesses the ability to manage their employee's Android mobile devices. The deal gives Google a foothold in the enterprise space with a company smaller yet similar to Airwatch, which was acquired by VMware for more than $1.5 million, and Sunnyvale's Good Technology, which filed for an initial public offering last week.
Google confirmed the purchase to several media entities Monday, but did not disclose a price for the company, which had raised about $25 million in venture financing since being founded under a different name -- Enterproid -- four years ago.
While the price Google paid for Divide is unknown, it is highly unlikely to approach the price tag reported for San Francisco-based Twitch: Variety reported Monday that Google-owned YouTube is close to announcing the purchase of the video game-streaming company for more than $1 billion, putting it in league with other megamergers from the company of late, such as Nest Labs and Waze. The Wall Street Journal also reported on talks between the companies, but were not as adamant about the possibility of a done deal, reporting that no firm price had been disclosed and saying that completion was not imminent.
Twitch allows video game fans to broadcast their gameplay live or tune in to such broadcasts on its service, and spun out of popular online video site Justin.tv in 2011. The site's setup brings in viewers for longer amounts of time than typical YouTube visits, which generates more premium ads that would help Google's video-sharing service, Seth Bardelas of video-advertising software company TubeMogul told the Journal.
Citigroup analyst Mark May ran the numbers on the deal and decided it would be a strong move by Google, writing in a Monday note that Twitch "has not only become the leading player in 'game broadcasting' but also one of the largest providers of online streaming video."
Using metrics for Twitch viewership and ad rates for YouTube, May writes that Twitch could generate $200 million a year for Google in ad revenues at current levels, and those don't take into account the growing popularity of Twitch, which reportedly doubled average monthly viewers in 2013. May also noted that Twitch has a subscription service, Turbo, that would generate another $200 million a year if just 5 percent of the service's viewers paid for it.
"In short, we like the strategic synergies and see the building blocks to a rational (even attractive) price tag," May wrote.
Google stock gained 2 percent to $538.83 Monday as the company showed off an Instagram account despite the app being owned by rival Facebook.
SV150 market report: GoPro almost ready to GoPublic as filing hits
Google wasn't alone, as tech stocks experienced a surge Monday: The tech-heavy Nasdaq index easily outpaced its broader index siblings with a 0.9 percent gain, and Silicon Valley stocks jumped 1.3 percent before a future colleague filed paperwork to join them on Wall Street.
San Mateo action-camera company GoPro's IPO filing was made public Monday afternoon, and showed revenues that would have put it in the top 60 Silicon Valley technology companies in terms of sales in 2013. GoPro's filing showed that the company has been profitable each of the past three years, a rarity for a tech firm aiming for Wall Street, and produced revenues of nearly $1 billion in 2013, which was more than many storied and high-profile Bay Area tech companies such as Cypress Semiconductor, Twitter and Workday. The company's filing with Securities and Exchange Commission targeted $100 million as an amount to raise, but that is likely just a placeholder until the company provides more information in an updated filing later this year.
Twitter dropped 0.6 percent to $32.07 while working on an acquisition of music-streaming service SoundCloud, Recode reported Monday, suggesting that valley companies are trying to bet on the future of music, with Apple reportedly making a big offer for Beats Electronics. Apple moved 1.2 percent higher to $604.59 after Friday afternoon's patent truce with Google, and reportedly could be looking at a settlement with Samsung. Facebook jumped 2.1 percent to $59.21 while striking a big ad deal with Publicis and reportedly working on a Snapchat rival, and Yahoo added 1.4 percent to $33.89 after Yahoo Japan gave up plans to acquire a mobile network operator. Cisco dropped 0.1 percent to $24.35 after CEO John Chambers complained to President Barack Obama about allegations that the NSA intercepted and bugged Cisco equipment, and Intel moved 0.9 percent higher to $26.04 after CEO Brian Krzanich promised that the chipmaker's new Broadwell processors will be ready in time for the holiday shopping period.
Up: Pandora, Yelp, Zynga, Netflix, Workday, Nvidia, LinkedIn, Salesforce, Tesla, Intuit, Facebook, Google, Hewlett-Packard, AMD, NetApp, Gilead, Yahoo, SunPower, Apple, Oracle
Down: SolarCity, Twitter, Applied Materials, Symantec, Cisco
The SV150 index of Silicon Valley's largest tech companies: Up 18.12, or 1.3 percent, to 1,412.44
The tech-heavy Nasdaq composite index: Up 35.23, or 0.86 percent, to 4,125.81
The blue chip Dow Jones industrial average: Up 20.55, or 0.12 percent, to 16,511.86
And the widely watched Standard & Poor's 500 index: Up 7.22, or 0.38 percent, to 1,885.08
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