Japan’s Rakuten buys messaging app Viber for $900mln

Japan’s Rakuten buys messaging app Viber for $900mln

PanARMENIAN.Net - Japanese e-commerce firm Rakuten, controlled by the billionaire Hiroshi Mikitani, will buy messaging app Viber for $900 million, the firms announced on Friday, Feb 14, according to the Guardian.

The deal would more than double the number of users in Rakuten’s digital empire, which offers services from financing to shopping to online video on its e-commerce platform, the largest in Japan.

In the face of a shrinking population and weak consumer spending at home, however, Mikitani is trying to re-invent Rakuten as a one-stop-site for a global audience.

Privately held Viber, run from Cyprus by the Israeli entrepreneur Talmon Marco, will add 300 million users to Rakuten’s existing 200 million users, Mikitani told reporters in Tokyo.

“This acquisition … will take Rakuten to a different level … Developing this messaging system on our own would have been impossible,” said Mikitani, who is also the company’s chief executive, adding that Rakuten users could, for example, use Viber’s instant messages to contact an online store while considering a purchase.

Rakuten’s e-commerce platform, Rakuten Ichiba, is the sixth largest in the world by sales. The company puts a premium on its ability to communicate with customers.

Last year, Mikitani told Reuters this personal touch will give Rakuten the edge over rivals like eBay and Amazon in Europe, where recession-hit retailers are struggling to tempt clients to spend.

Rakuten has spent big in recent years on a variety of overseas purchases to broaden its businesses and reach under what Mikitani calls its “Rakuten Ecosystem” strategy.

The company has acquired e-commerce providers from Brazil to Germany, as well as Toronto-based eReader business Kobo and online video providers Wuaki.tv of Spain and Viki of Singapore. In 2012, it made a large investment in website Pinterest.

“This combination presents an amazing opportunity for Viber to enhance our rapid user growth in both existing and new markets,” said Marco in a statement. “Sharing similar aspirations with Rakuten, our vision is to be the world’s number one communications platform and our combination with Rakuten is an important step in that direction.”

Viber is one of the top five most downloaded smartphone phone call and messaging apps, and counts the United States, Russia and Australia among its biggest markets. It recently launched an instant messaging app for personal computers that allows users to make outgoing mobile calls to other Viber users and non-registered mobiles, making it a rival to Skype.

Its 300 million registered users represents growth of over 120% in 2013. But the company is tight-lipped about how many of its users are “active”, rather than merely signed-up for the service. By indicators such as tweets or Google search activity, it appears tiny in comparison to competitors such as Skype and Whatsapp.

The acquisition by Rakuten is expected to be completed by the end of March, both companies said.

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