Amazon Buys Comedy Service Rooftop Media to Expand Digital Content

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This story originally appeared on Reuters

Amazon.com Inc is buying online comedy service Rooftop Media, a small deal that underscores the Internet retailer's broader ambition of becoming a media and entertainment powerhouse.

Amazon is persisting in buying content to round out its service, with designs to take on Netflix Inc and other online digital media services. But that increasing spending has helped keep the company in the red, inviting criticism from investors.

Audible, the audiobooks service it bought in 2008 for $300 million, is picking up the 10-person company for an undisclosed sum. Audible founder and Chief Executive Donald Katz said in a statement on Monday the company had been attracted by Rooftop's content as well as its pool of comic talent.

Rooftop records comedians at clubs across the country and licenses the digital rights to thousands of hours of comedy, which is broadcast either live or later on demand. The company's media partners include Apple Inc and Yahoo, and it also works with streaming services such as Sirius XM, Spotify and Pandora.

Its content now becomes part of Audible, itself a fast-growing seller of online audiobooks, and vastly increases Rooftop's audience, said Rooftop Chief Executive Officer Will Rogers.

Amazon is expected to continue acquiring digital content at a rapid clip. In past years, it began investing heavily to branch out from its online retail roots, delving into Hollywood-style content production as well as developing a line of tablets, smartphones and set-top boxes to accelerate the sale of digital content.

Chief Executive Officer Jeff Bezos' vision of becoming a tech and media powerhouse, however, has drawn protests from an investor community that for years overlooked its lack of profits because of red-hot revenue growth.

That growth may be in danger of stalling. Last week, the company missed revenue and income expectations and projected a disappointing 7 to 18 percent rise in holiday-quarter sales.

Amazon's stock was up 0.6 percent on Monday but is down about a third from January.

(Reporting by Liana Baker; Editing by Meredith Mazzilli and Cynthia Osterman)

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