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Amazon to pay $1.1b for Twitch game site

Video platform had been sought by Google, too

A video game being broadcast from the Twitch app for Xbox One.

Microsoft/Twitch/AP

A video game being broadcast from the Twitch app for Xbox One.

SAN FRANCISCO — Jeff Bezos is ramping up Amazon.com’s entertainment ambitions, buying the video service Twitch Interactive Inc. for more than $1 billion in its biggest acquisition ever.

Amazon moved in to buy the online gathering place for video gamers after the startup’s deal with Google fell through, people with knowledge of the matter said. Amazon is paying $970 million in cash. Including retention-related payouts, the transaction is worth about $1.1 billion, said one of the people, who asked not to be identified because the talks are private.

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The deal, the largest in Amazon’s 20-year history, gives the Web retailer an online forum of more than 55 million monthly active users, where people discuss games or watch other gamers as they play. Bezos, Amazon’s chief executive, has made video games a focus of a strategy to add entertainment services.

Just as the company is beefing up its TV programming, available to Amazon Prime members, it is operating a game studio in Seattle and has been luring software developers to build more video game titles for its Fire TV set-top box, Fire Phone, and Kindle Fire tablets.

‘‘Broadcasting and watching gameplay 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.

The deal also highlights the stepped-up rivalry between Amazon and Google. In addition to battling for customers who watch an increasing amount of video through the Internet, the two companies are competing for business in online data storage and Internet advertising.

Google and Twitch were in talks earlier this year on a transaction that could value Twitch at about $1 billion, a person familiar with discussions said in May. As the deal with Google was being discussed, investment banker Frank Quattrone introduced Twitch to other potential bidders, one of the people said.

Buying Twitch for about $1.1 billion would be larger than Amazon’s acquisitions of Zappos.com Inc. in 2009, Kiva Systems Inc. in 2012, and Diapers.com in 2010. The Twitch deal is expected to close later this year.

Amazon paid $817.3 million in stock for Zappos. It has not been a prolific deal maker like Google or other large technology companies, buying just 18 companies since 2012, according to data compiled by Bloomberg.

As people move more of their entertainment habits online and away from traditional TV, interest has grown in online video companies with large user bases.

Walt Disney recently agreed to purchase Maker Studios for as much as $950 million, setting set off a rush to invest in or acquire video companies that have large viewer bases.

Amazon is spending $100 million to produce TV shows for its Prime customers and introduced a music-streaming service earlier this year.

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