Amazon and Twitter are expected to announce a $50 billion merger next week.
The deal would bring the social-media giant closer to becoming the world’s largest online retailer and internet company.
Amazon and Google would combine with their own Amazon Studios and Google Now services, a move that would also allow the two companies to expand their online presence.
It would also bring Amazon into the larger global tech market, giving it greater leverage in the fight for relevance in the increasingly fragmented digital marketplace.
It’s a significant step for Amazon and a dramatic change in how the company thinks about its relationship with its customers.
But for now, the deal is largely a deal between two companies.
The $50 million a year Amazon will pay Twitter to use Twitter’s API will be split among the two tech giants based on their combined market share, a source familiar with the matter said.
Twitter will receive roughly $5 billion from Amazon for its services and the other $3 billion will be used for other projects, including $1 billion for Amazon’s media division and $500 million for its own programming and entertainment division.
The money will be put into a fund that is backed by Amazon, Twitter, YouTube, Google, Microsoft and Facebook, the source said.
Amazon will be paying Twitter $30 million annually to use its platform.
Twitter would receive the remaining $5 million.
The amount of money paid by Twitter will depend on Twitter’s valuation.
Amazon has long valued Twitter’s platform at roughly $100 million.
Twitter is looking for $250 million in funding to buy the platform, according to sources familiar with its plans.
Twitter declined to comment on the size of the merger.
The announcement comes as Twitter has been embroiled in a dispute with Twitter CEO Jack Dorsey over the way the company treats harassment allegations against users.
Dorsey has been a vocal critic of Twitter’s handling of the controversy.
Twitter and Twitter CEO Dick Costolo have both denied any collusion and said they are committed to the platform.
“We have built an amazing platform that helps people share, engage and create the content that matters most to them,” Costolo said in a statement.
Amazon and Facebook declined to be interviewed, but in a recent blog post, both companies said that they are “committed to building an even stronger digital economy.” “
This transaction will create jobs and create wealth for millions of people, including thousands of employees, to continue to work on this amazing platform.”
Amazon and Facebook declined to be interviewed, but in a recent blog post, both companies said that they are “committed to building an even stronger digital economy.”
The deal also would give Amazon a new platform for its growing Echo speaker, which was previously available only through the Echo app.
Amazon also is expected to unveil a $2 billion acquisition of a cloud-based music streaming service called Spotify that was originally developed by Microsoft.
Amazon said in an earnings call on Wednesday that it would also launch a new Amazon Music store, which it said would launch “later this year.”
Amazon also said it will be bringing its video and music apps to Amazon Fire tablets.
The company also is investing $1.6 billion in the Amazon Fire TV, which would replace the Fire TV Stick.
Amazon is expected next to make a final announcement about the transaction next week, when it will likely announce a number of other deals, including a deal for Amazon Prime memberships.
Amazon stock has fallen about 4% in the past week as investors fear that the deal may be too large for the company.
The stock has gained about 3% this year, and was trading above $30 before the deal was announced.
It closed Thursday at $34.07.