Amazon just threw down with Google, will it pay off?

By James Dennin for Kapitall.

If you've never heard of Twitch, then you're probably not a gamer. 

Twitch " dominates" streaming for the global e-sports market, the growing community of gamers who watch users compete in real time. Their audience doubled last year to 45 million people. 

The word on the street was that Twitch was all set to be acquired by Google  (GOOGL). Coupled with YouTube, the pair would have been the dominant force in the online streaming world at a time when Google is going to great lengths to become a major player in streaming. 

Amazon has been on a similar quest as well with its Amazon Prime, Amazon Fire, and even digital gaming offerings. The retailer sells its own controllers and made some impressive hires in the gaming industry—although its most notable offering in the space so far is probably  still its ramped up version of Flappy Birds

The acquisition has many people scratching heads, mostly because if you don't game, you probably don't really know what Twitch is. But that's changing as well; in July, Twitch streamed a performance by the EDM artist Steve Aoki live from Ibiza

That electronic music thing is actually pretty popular with the kids today too, suggesting that Twitch has grander designs than helping viewers navigate frustrating game levels.

Twitch's growth and emphasis on real-time streaming make it one of the most intriguing names in a field that's crowded with incumbents like Spotify who continue to struggle to turn a profit

That being said, Amazon is paying a lot for Twitch. Almost $1 billion, which is a lot, lot more than Google spent on its last streaming play, the music curation and playlist app Songza. 

Bezos was obviously willing to pay a premium for the service, otherwise he wouldn't have looked to a company that was already on the verge of being acquired by someone else. 

But will the expensive bet be worth it? Use the list below to begin your analysis, and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 

1. Amazon.com Inc. ( AMZN): Operates as an online retailer in North America and internationally. Market cap at $161.82B, most recent closing price at $351.78.

 

 

2. Google Inc. ( GOOGL): A technology company, builds products and provides services to organize the information. Market cap at $399.46B, most recent closing price at $592.54.

(List compiled by James Dennin. Monthly returns sourced from Zacks Investment Research.)

 

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Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

 

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