Tomahawk, WI 08/26/2014 (Basicsmedia) – Amazon.com, Inc. (NASDAQ:AMZN) push to leverage on the fast growing video-streaming business received a much-needed boost on Monday after the company agreed to pay $970 million for Twitch according to BMO Markets analyst, Edward Williams, in an interview on CNBC.
The huge user base of up to 55 million that Twitch commands look to have been the attractive feature that prompted Amazon to table a bid, consequently beating the likes of Google Inc. (NASDAQ:GOOG)‘s YouTube in the process. Amazon.com, Inc. (NASDAQ:AMZN) looks set to use Twitch to penetrate the digital ad market. Twitch acquisition also gives Amazon a valuable entertainment asset that it can use to enhance its advances in the video streaming space.
“What I think Amazon tries to do is to kind of engage with their consumers as frequently as they can I think Twitch certainly will help them to engage with the consumers on a more frequent basis. I think Twitch can leverage on the e-commerce side,” said Mr. Williams.
Amazon acquiring Twitch highlights its vision of pursuing the gaming industry, having launched Fire TV Streaming media player, as well as Kindle Fire tablet that continue to be dominant with many gaming fanatics.
The acquisition of Twitch also highlights how Amazon has been diversifying its operations instead of entirely focusing on its lucrative online business. Williams has quashed concerns that Amazon shareholders will question the move to pay such an amount of money for Twitch, instead of returning it to as dividends or stock buybacks.
Williams maintains that Amazon.com, Inc. (NASDAQ:AMZN) Shareholders remain confident on the company’s vision as well as the management team that remains focused’ on growth through acquisitions.
“ […] I don’t think that investors should necessary going to say, you know, I want that cash back for me. I think the investors do want there to be growing profitability so that they understand that the topline growth is also going to co-relate to some bottom line growth,” said Mr. Williams.
Acquisition of Twitch also highlights CEO’s, Jeff Bezos, vision to transform Amazon.com, Inc. (NASDAQ:AMZN) into an internet giant away from its core retail business that it has over the years been a dominant force.