Rakuten, the Japanese e-commerce and Internet company, announced that it is acquiring Viber Media Inc., a cross-platform instant messaging voice-over-Internet Protocol application, for $900 million.
According to Hiroshi Mikitani, the co-founder and CEO of Rakuten, the acquisition is a “no brainer,” pointing out that messaging apps are taking over the world as people now prefer to communicate using these apps rather than sending emails or text messages.
Rakuten offers video streaming, shopping, games and other online contents, and it lacks a communication platform to tie all its elements in. With Viber, Mikitani sees more growth for the company, especially when it comes to online shopping.
Mikitani also noted that the acquisition came at a perfect time. If Rakuten waited too long, there’s a possibility that the deal would not happen given Viber’s rapid growth.
“Today, to survive, I think you have to have a messaging app, because that is where consumers are active,” said Mikitani.
Viber offers free calls and messages, as well as the ability to send photos to anyone anywhere in the world. Unlike other popular messaging apps that are popular only in certain countries or regions such as Japan’s Line and South Korea’s KakaoTalk, Viber has a broader reach with 300 million users in over almost 200 countries. Aside from gaining a lot of Viber users, Mikitani expects to rake in more revenue especially with the paid stickers offered in Viber’s market.
“This combination presents an amazing opportunity for Viber to enhance our rapid user growth in both existing and new markets.
“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 CEO Talmon Marco stated.
With Rakuten’s acquisition of Viber, it will now compete with Line, a very popular communication platform in Japan.
Mikitani made it clear that Marco and other key executives have a long-term commitment to stay with the company.
Rakuten is clearly expanding outside Japan to be able to better compete with other retail and online giants, and it’s doing so through strategic acquisitions and partnerships.
In order to become globally competitive, Rakuten adopted English as its official language. It acquired Priceminister, a French online retailer, for €200 million, and US-based online retailer Buy.com for $250 million.
The company launched Rakuten Belanja Online in Indonesia, and at the same time bought e-commerce sites in Ikeda from Brazil, and Tradoria from Germany. Ikeda rebranded as Rakuten Brazil, and Tradoria rebranded as Rakuten Deutschland. Later that year, Rakuten acquired UK online retailer and e-commerce marketplace Play.com for £25 million, and took a minority equity stake in Russian online retailer Ozon.ru,dubbed “Russia’s Amazon.”
In January, Rakuten dug into digital publication when it bought Canadian e-book reader company Kobo. In May, the company announced that was leading a consortium investing $100 million in Pinterest, the pin-sharing social network, to help expand Pinterest’s footprint in Japan.
In June, it bought Wuaki.tv, a Spanish video on demand service/company. It is one of the largest VOD services in Europe and the acquisition opened new doors for Rakuten, as well as new opportunities to compete with the likes of Amazon and Netflix.
Rakuten then bought Alpha Direct Services, a French online retail delivery company in November, to enhance its delivery services.
These acquisitions allowed Rakuten to move into the online retail scenes in Austria, Canada, SPain, Taiwan, and Thailand. With its acquisition of PriceMinister, it was also able to delve in the online travel market as it owned VoyagerMoinsCher.com, a French online comparison for travel deals.
Rakuten acquired a majority share in The Grommet, a “citizen commerce site,” in May.
The following month, it announced its acquisition of US-based logistics and services company Webgistix. The acquisition helps Rakuten to specialize in fulfillment technology for e-commerce retailers.
And before its Viber acquisition, it acquired Viki, a Singapore-based video streaming company, for $200 million. Viki is described as “Hulu for the rest of the world.” It offers Asian TV series movies that have been subtitled so the rest of the world can enjoy these programs.