(Adds analyst comment, background on the deal)
By Deepa Seetharaman and Malathi Nayak
SAN FRANCISCO Aug 25 Amazon.com Inc
snapped up live-streaming gaming network Twitch Interactive for
about $970 million in cash, marking the largest deal in the U.S.
e-commerce company's 20-year history.
The move, announced on Monday by the two companies, is an
unusual step for Amazon, which has tended to prefer building
from within or making smaller acquisitions. It reflects Chief
Executive Jeff Bezos' resolve to transform Amazon into an
Internet destination beyond its core retail operations.
The deal is expected to close in the second half of the
year. Amazon apparently beat out tech rival Google Inc
, which was previously in talks to buy Twitch -
launched in June 2011, one person briefed on the deal said.
Amazon has been spending more on original television and
gaming content over the last several years. It will spend $100
million on original content alone in the third quarter.
"It's clear that Amazon will want to find more content that
it can control," Forrester Research analyst James McQuivey said.
"Twitch is a good fit this way because it captures people's
attention for hours a week and it also creates a product tie-in
opportunity that Amazon can capitalize on in a way that Google
could not," he added.
Twitch's format, which lets viewers message players and each
other during live play, is garnering interest as one of the
fastest-growing segments of digital video streaming, which in
turn is attracting more and more advertising dollars.
More than 55 million unique visitors viewed more than 15
billion minutes of content on Twitch in July.
"Broadcasting and watching gameplay is a global phenomenon
and Twitch has built a platform that brings together tens of
millions of people who watch billions of minutes of games each
month - from 'The International,' to breaking the world record
for 'Mario,' to gaming conferences like E3," Chief Executive
Jeff Bezos said in a statement.
Twitch raised $20 million in funding last September from
game publisher Take-Two Interactive Software and firms
such as Bessemer Venture Partners and Thrive Capital.
"We're keeping most everything the same: our office, our
employees, our brand, and most importantly our independence,"
Emmett Shear, CEO, said in a blog post. "But with Amazon's
support we'll have the resources to bring you an even better
Investors have noticed Twitch's rapid growth, from some 3.2
million players when it initially launched in 2011. Some of its
most-followed players rake in six-figure salaries through a
50-50 split in advertising revenue, $5 monthly subscriptions to
livestream channels, and even spontaneous donations from fans.
(Reporting by Deepa Seetharaman and Malathi Nayak; Editing by
Leslie Adler, Bernard Orr)