Final answer:
Amazon bought Twitch to enter the growing esports and livestreaming market, which fits their strategy of business diversification and targeting the digital consumer base. Their history in revolutionizing book sales through economies of scale and competitive pricing indicates a broader trend towards market expansion.
Step-by-step explanation:
The purchase of Twitch by Amazon was primarily driven by Amazon's desire to tap into the growing esports and livestreaming market. This decision aligns with their broader strategy of expansion and diversification into various business verticals. Twitch, a popular game-streaming site, has a massive user base that is highly engaged in content creation and consumption, making it a valuable asset for companies targeting the young and technology-savvy demographic. This move was not just about expansion but also about securing a foothold in an emerging market that has significant overlap with Amazon's core demographic for e-commerce businesses.
Amazon's strategy has always encompassed diversification and the leveraging of synergies between different sectors. Historically, Amazon revolutionized the book selling industry by using a production model and cost structure that allowed them to undercut traditional retail prices, often including the cost of shipping. They shifted the norm from small, inventory-limited bookstores to a massive online marketplace with prompt delivery, demonstrating the power of economies of scale.