Boston, MA 08/28/2014 (wallstreetpr) – Amazon.com, Inc. (NASDAQ:AMZN), a leading online retailer, offered $970 million to acquire Twitch, a company that makes money mostly through the sale of games. That was a good move for Amazon because it helped it takeover the company that its rival Google Inc (NASDAQ:GOOG) also wanted. Twitch may also play a key role in boosting Amazon’s traditional marketplace business.
It appears as though Amazon has an insatiable appetite for promising businesses, of course, it has a responsibility to create value for its shareholders and making strategic acquisitions is very much in order. From announcing a music streaming service to unveiling Fire Phone, Amazon.com, Inc. (NASDAQ:AMZN) moved to acquire Twitch, which its executives say has the potential to take their performance to the next level.
Taking on YouTube
Besides raking in money through the sale of games and other media and entertainment content, Amazon expects Twitch to also boost its shopping business. Furthermore, the business would be important in helping Amazon catch up with YouTube or even beat it at its own game if possible. YouTube, owned by Google, is the dominant force in the online recorded video and game-related content. Google sought Twitch to boost YouTube’s position. That means that Amazon already knows where to start with Twitch, in case that was not immediately clear earlier.
Google failed to ink a deal with Twitch because the two companies could not find a common ground on breakup fee in the event that regulators declined to approve the deal.
Long-term view for Fire Phone
As already mentioned, Amazon.com, Inc. (NASDAQ:AMZN) recently debuted Fire Phone but analysts have questioned whether the device has any chance against Apple and its iPhone devices and Samsung with its high-performance large screen gadgets. Fire Phone asks for $200 with an AT&T contract. That price level puts it in direct competition with premium gadgets from Apple and Samsung, which may make it difficult to achieve quick market penetration. Nonetheless, some have also said that Amazon’s plan for Fire Phone may be long term.
