If you can’t beat them, buy them. While YouTube has tried their hand at live streaming, they aren’t as big as live streaming powerhouse Twitch. So how do you fight back? You buy them.

YouTube has dipped into Google’s massive pockets and reportedly come up with $1 billion to buy Twitch in what would be the online video site’s largest acquisition.

The deal is being reported by Variety. Their sources say that YouTube is making an all-cash offer for Twitch of more than $1 billion. Prior to this, Twitch had received only $35 million in venture capital investments.

The acquisition of Twitch by YouTube would make for a powerhouse video platform. YouTube is far and away the largest video website on the internet. Twitch is one of the biggest livestreaming sites on the internet. While both websites are in the top fifteen in the world in terms of bandwidth used, YouTube boasts a billion monthly users but Twitch has its bandwidth ranking on the back of only 45 million monthly users. Still, looking at the percentages of downstream bandwidth used, YouTube may have 20 times the user base but only 10 times the bandwidth used. Yeah, Twitch is a pretty big deal.

Variety also reports that the purchase is likely to have to through regulatory approval. Given the size of the two sites relative to their competitors, competitive issues from the purchase may arise. However, if Comcast and Time Warner can lobby their way to regulatory approval of that deal, I’m sure that YouTube and Twitch can too.

I should note that the Wall Street Journal is not reporting this as a done deal. They say that the deal is still under negotiations and matters are still at an early stage. That’s the only other original reporting I’ve seen. Everyone else is going off the Variety report and re-reporting that.

The big concern I have is what this might do to competition. If they integrate Twitch livestreaming with YouTube livestreaming so one stream hits both sites, that would be an upside to the deal. If Twitch got some better VOD playback, that would be a benefit to them. If YouTube just squashes any momentum that Twitch has by changing the monetization models or the copyright checking or how the chat and community functions works, this will be a bad deal.

Basically, if YouTube changes the basics of what already works for Twitch, they would be better off burning the billion dollars. I hope that there aren’t any pyromaniacs working for Google and YouTube.

Sources: Variety, Wall Street Journal