E-commerce giant Amazon.com, Inc. announced on Monday plans to buy video game broadcaster Twitch for $970 million, a move seen to be part of its effort to reach out to gamers and strengthen its web-hosting business.

Amazon.com CEO and founder Jeff Bezos said in a statement that the acquisition was driven by Twitch's success in building a platform to broadcast gameplay that attracts millions of people monthly. The deal is expected to be completed during the second half of 2014.

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The Huffington Post explained that Twitch generates revenue from advertising and selling subscriptions on its live streaming service, where people can watch others play videogames or participate in video game tournaments.

The San Francisco-based Twitch may not be a household name, but it is wildly popular in the gaming community. More than 55 million people use Twitch monthly, the company said. Half of them spend more than 20 hours per week, the news site reported. Meanwhile, the New York Times said Twitch is among the 15 most-trafficked websites around the world based on data from Internet networking company Sandvine.

In an interview with Huffington Post, R.J. Hottovy, lead consumer analyst at Morningstar, said Twitch provides Amazon a new advertisement platform that regularly draws in the gaming community. Aside from this, Twitch's live streaming technology can also bolster Amazon Web Services, the company's huge web-hosting business.

With the acquisition, Amazon beat out Google, which reportedly was interested in buying Twitch as well for over a billion dollars.  Amazon's successful acquisition of Twitch further heightens its emerging rivalry with Google. The Seattle-based Amazon is reportedly working on its own online advertising program that is designed to challenge Google's dominance in that arena.

Twitch CEO Emmet Shear said in a statement that the company chose Amazon because of shared values, and its desire to further grow Twitch. He added that Twitch will retain its independence despite the takeover.

TagsAmazon, Twitch