Amazon Acquires Ring, Maker of Video Doorbells

The acquisition, believed to be Amazon’s second biggest after its roughly $13.5 billion purchase of Whole Foods last year, is the latest in a string of moves that signal the company’s ambitions to enter a staggering variety of markets. From its start as an online bookseller in Chief Executive Jeff Bezos’s garage more than two decades ago, the company has expanded into delivering its own packages, building a dominant cloud computing services business and becoming a brick-and-mortar grocer overnight with its acquisition of Whole Foods.

The latest deal plays to Amazon’s efforts to control the devices that power smart homes, an area in which it is becoming a dominant player. Certain Ring doorbells and cameras already connect with its virtual assistant, Alexa.

Package theft has become an increasing problem for e-commerce companies as consumers order more online. Amazon has responded with solutions including package lockers and apartment buildings’ package hubs. Late last year, it launched its Cloud Cam security camera combined with its “Amazon Key” product, which allows its delivery drivers to deposit packages into customers’ homes via a smart lock system.

The Ring acquisition also increases Amazon’s threat to Alphabet Inc . GOOGL -2.29% ’s home automation unit, Nest Labs, which Google acquired for $3.2 billion in 2014. Nest is a leading player in the smart-home security field and makes internet-connected thermostats, smoke detectors and security cameras that work with both Google and Amazon’s virtual assistants.

According to Research and Markets, the global home security market is expected to reach $51.5 billion by 2022. The firm predicts the do-it-yourself segment of the market will grow the fastest, as installation gets cheaper and easier.

Amazon’s acquisitions break with the online retail giant’s typical strategy of building out its own solutions. In December, Amazon bought wireless home-security camera maker Blink for an undisclosed sum. In acquiring Ring, Amazon buys a technology that allows homeowners to see, hear and speak to anyone at the door via their smartphones, tablets or PCs. Ring also makes security cameras.

Stock prices of ADT Inc . ADT -4.53% , a security company, fell 5% to close at $11.60 per share on the deal news, which was reported earlier Tuesday by GeekWire, and they were again lower in after-hours trading.

Amazon and the four-year-old Santa Monica, Calif.-based Ring announced the deal Tuesday in brief statements that provided no financial details. Ring also said in its statement that it will be able to achieve more by teaming up with Amazon.

Ring was valued at around $1 billion in its last round of private investment, including the amount of the funds it raised, said the person familiar with the transaction.

The person said the Ring acquisition was larger than Amazon’s acquisitions of Twitch Interactive, a popular internet video channel for broadcasting, and online shoe retailer Zappos.com, both of which closed for roughly $1 billion.

Write to Laura Stevens at laura.stevens@wsj.com and Douglas MacMillan at douglas.macmillan@wsj.com