Amazon's Twitch Hit a Wall in Live Streaming
Amazon (NASDAQ: AMZN) bought Twitch, a live-streaming app focused on gaming, in 2014 for nearly $1 billion. Just a year and a half ago, that investment looked like it would pay investors back handsomely with Twitch setting a goal to reach $1 billion in ad revenue in just a few years.
However, those expectations were out of line with reality. Twitch generated around $230 million in ad revenue in 2018, and it was on pace to reach just $300 million by the middle of last year, according to a report by The Information. The company was expecting between $500 million and $600 million in annual ad revenue going into the year.
Twitch faces increased competition from several tech giants: Microsoft (NASDAQ: MSFT), Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) YouTube, and Facebook (NASDAQ: FB). Streaming hours continue to grow, but only slightly, as competitors eat into Twitch's market share. Still, the relatively slow growth in ad revenue is concerning considering Amazon's overall push into video ads last year.
Source Fool.com
