Amazon Grabs Twitch
Amazon outbid Google to acquire gaming platform Twitch for $970 million in cash and roughly another $40 million in retention-related payouts. The company has been spending heavily on content and customer acquisition as technology has brought about a sea change in consumption habits and platforms. Therefore, just as the digital consumption patterns of books, video and music prompted it to invest in platforms, content and people to develop suitable technologies, so also is the case for gaming.
The Twitch acquisition has helped on both counts, as it brought on board 55 million monthly active users watching “billions of minutes of games.” Twitch users are usually avid gamers watching video clips of games for entertainment or to learn new techniques. Therefore the customer base is sticky and growing.
This provides Amazon space to serve related product ads that could get them to spend on Amazon. It could also be used to attract them to Prime memberships, which comes with its own share of benefits. Amazon has a game studio where it is trying to create original gaming content so Twitch could be just the place to market what it makes, among other things.
Facebook Introduces Keyword Search
Facebook (FB) is testing a tool that could allow users to search all the unstructured content (comments, likes, pictures, video) intended for them by simply typing relevant keywords. The company has been indexing all the user-generated content, which is expected to make this possible.
The broader implication is of course the possibility that the company could get into the search market, but this seems like a distant possibility right now. Facebook’s search agreement with Microsoft’s (MSFT) Bing remains in place and the company’s graph search has met with lukewarm response. It also has privacy watchdogs nipping at its heels.
In contrast, Google (GOOGL) remains the unquestioned leader in the search market with the best results and speed. Moreover, it continues to innovate.
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Cisco Should Be a Buy Despite Share Losses: A UBS analyst explained Cisco’s share losses in the networking equipment market, particularly in the 10-gig segment. The analyst said that although the latest numbers from research firm Dell ‘Oro indicated that Cisco was losing share to Arista and Juniper (JNPR) (both are more established in SDN), Cisco’s share loss was small and it remained the dominant player with a 63% share. Further, Cisco, along with a few others is driving the transition to higher speeds; and growth in these segments was faster and price erosion slower.
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China is one of the fastest-growing markets and Apple’s premium brand has helped it deliver high growth rates. Samsung however has been hit at the low end of the market by a growing number of devices from local and other players. But carrier subsidies are essential for selling high-end devices, so both companies could be affected.
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