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Rakuten pays $900 million for messaging service VIber

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The name Rakuten may not be well-known to you -- we think it was far easier when the company called itself in the U.S. (Rakuten bought for $250 million in 2010) -- but it may become more of a household name, now. The company announced on Valentine's Day its love-fest with messaging and VOIP app Viber -- Rakuten said it had purchased Viber for $900 million. It also explained its thinking to Recode.

Why would an online retailer acquire a messaging app? Hiroshi Mikitani, co-founder and CEO of the Japanese online commerce giant Rakuten, said,

This is a no-brainer. Messaging apps are taking over the world and, while search is one of the strongest platforms, what is happening in communications is very, very important.

It may be a no-brainer, but is it really one for Rakuten? It could be, although the example Rakuten may be following was not all that successful.

Viber, launched in 2011, has close to 300 million users on all the major phone platforms. It is the only messaging app with a significant presence worldwide -- besides WhatsApp. Other such apps are big, but are more regional in popularity, such as KakaoTalk (Korea) or Line (Japan). In addition, Viber is very voice-oriented, and has been targeting the Internet communications business of Microsoft-owned Skype.

That could be a clue as to Mikitani's thinking. Linking messaging and commerce isn't new; it was behind the eBay acquisition of Skype. That never paid off for eBay, and it eventually sold the division to Microsoft. Then, though, there was not a ubiquitous smartphone and tablet presence.

Mikitani said:

We have content and games and commerce and markets and services, but they need the ability to reach out and talk to customers wherever they are. With this, we can make buying more secure, but also more human.

Rakuten has been on an international buying spree in recent years, spending billions of dollars on acquisitions. Among its major investments in the last four years were the aforementioned acquisition, a minority stake in U.S. online photo scrapbooking-site Pinterest, the acquisition of French Internet marketplace PriceMinister SA (in 2010, for €200 million), and the acquisition of Canadian e-book firm Kobo for $315 million in 2012.


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