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That makes Twitch AMZN's biggest acquisition of all time, followed by its 2009 purchase of online shoe retailer Zappos for $928 million. AMZN stock is up 3% so far this week on the news.
You may remember Twitch-related headlines from May. Google Inc. (Nasdaq: GOOG, GOOGL) was in negotiations to buy it, but the two companies ultimately failed to reach a deal due to antitrust issues, according to Forbes.
Not so with Amazon. The world's largest online retailer's purchase of Twitch comes after a long line of recent growth.
On August 20, Amazon announced a new headquarters in China to gain Asian market share. On August 13, it announced the launch of a mobile credit card reader called "Amazon Local Register" to compete with the likes of Square. In July, AMZN launched its own smartphone (the "Fire Phone"), and in April, it released its own set-top box TV (the "Amazon Fire").
"These guys leave no stones unturned for the next dollar they can bring in," Money Morning Defense & Tech Specialist Michael A. Robinson said earlier this year. "Amazon is constantly upselling, cross-selling, and looking for new products, and they're great at it."
Acquiring Twitch will benefit Amazon – and AMZN stock – for one big reason…
AMZN to Gain a Dedicated, Hard-to-Reach Audience It Can Monetize
Twitch is a gaming site – but it's atypical in that users aren't actually gaming themselves when they log on. Instead, they're logging on to watch live video streams of other gamers playing popular titles like Starcraft II, DOTA 2, League of Legends, Call of Duty, and Minecraft.
By watching the best players, users can pick up tips and tricks to improve their own gaming strategies, or they simply tune in for sheer entertainment – much like watching a live sporting event.
Last fall, 32 million people watched the "League of Legends Season 3" World Championship – more than twice the number of people who watched the World Series between the Boston Red Sox and the St. Louis Cardinals.
Here are some mind-blowing numbers about Twitch's user base: