It’s been a while since Amazon has been at the center of a major tech company’s announcement, but the company is once again at the forefront of a tech company announcement.
Last month, Amazon announced it would be purchasing a majority stake in Snap Inc. (NASDAQ:SNAP), a digital video streaming company that has become one of the most popular streaming services in the country.
The company is now taking over Snap’s parent company, Vox Media, which had been part of Snap’s previous management, which was acquired in 2016.
Snap had already raised a $1.5 billion Series B round, but Amazon is now the only investor in the company.
Snap has made the announcement of Amazon’s purchase official in a press release.
The acquisition has raised eyebrows in the tech community, with some critics saying the deal shows how Amazon’s rise is about to become mainstream.
The deal will be worth $25 billion, but there are concerns about the company’s ability to compete with Google (NASCOM:GOOG), Amazon’s competitor.
The announcement comes just months after Snap said that its IPO price had been slashed to $2.99 from $6.99.
Snap’s stock price is up more than 20 percent so far this year.
But investors are not buying the stock and have been less than enthusiastic about the deal.
Snap CEO Kevin Systrom told the Wall Street Journal that Amazon’s acquisition is not only a huge win for Snap, but it will make the company a more powerful competitor for Google.
“We’re going to be able to take the fight to Google,” he said.
“They can’t just go up against us.”
But Amazon isn’t the only company that is looking to acquire Snap.
Earlier this month, Alphabet (NASO:GAS) said it would buy a majority of Snapchat’s stock in a deal valued at $3.2 billion.
While the deal is a major boost for Snap’s valuation, it doesn’t seem to be as big a deal for Amazon.
Systrom said Amazon is also in the process of building out its own product and infrastructure to compete against Snap, which is why the deal does not necessarily represent a direct threat to Snap.
The transaction is expected to close in the second half of 2019, and Amazon has promised to continue investing in the platform for a long time.
The New York Times also points out that the deal could create an opportunity for Snap to continue expanding into other areas, like video streaming and content delivery.
Snap is one of several major streaming services that have seen their share prices soar in the past year, as companies like Amazon, Netflix, and YouTube have expanded their offerings.
