The Seattle e-commerce giant said Monday afternoon that it had agreed to pay $970 million in cash to acquire Twitch, a San Francisco start-up.
Amazon Chief Executive Jeff Bezos said the company wanted to help Twitch "move even faster" to build new services for the gaming community.
“Broadcasting and watching game play 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," Bezos said in a statement. "And, amazingly, Twitch is only three years old.”
Under the terms of the agreement, which has been approved by Twitch’s shareholders, Amazon will acquire all of the outstanding shares. The acquisition is expected to close in the second half of 2014.
The news is a turnabout from earlier reports that pegged YouTube as the all-but-certain buyer for Twitch.
The YouTube deal -- then rumored to be in the $1-billion range -- was said to be imminent once the two sides hammered out final details, and was expected to help YouTube, the world's largest video-sharing community, secure its foothold in the rapidly growing game-play video market.
Instead, talks between Google-owned YouTube and Twitch fell through a few weeks ago; Yahoo then made its own bid, but those talks also were unfruitful. That paved the way for rival Amazon to step in and take over.
For Amazon, owning Twitch gives the company a valuable entertainment asset as it looks to build its reach in the fast-growing video-streaming space.
Twitch specializes in live streaming games to spectators, sometimes with live commentary, much like a professional sports event on prime time.
Since launching in 2011, the San Francisco start-up has fostered a robust online social community where viewers can follow their favorite channels, chat with each other while watching content, and send and receive direct messages.
In July, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch produced by more than 1 million broadcasters, including individual gamers, pro players, publishers, developers, media outlets and conventions.
“Amazon and Twitch optimize for our customers first and are both believers in the future of gaming,” Twitch Chief Executive Emmett Shear said. “Being part of Amazon will let us do even more for our community. We will be able to create tools and services faster than we could have independently. This change will mean great things for our community, and will let us bring Twitch to even more people around the world.”
The long-term ad revenue from a Twitch acquisition could be massive, analysts said. Twitch caters to an attractive demographic: typically young, tech-savvy men who have time on their hands and money to spend.
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