* Rakuten acquires Viber for $900 mln
* Says deal will boost digital content distribution globally
* Viber purchase part of Rakuten's expansion strategy
* Rakuten ID users will jump to half a billion with Viber
* Rakuten full-year 2013 profit jumps 80 pct to 90.2 bln yen
By Chang-Ran Kim
TOKYO, Feb 14 Japanese e-commerce giant Rakuten
Inc, controlled by billionaire Hiroshi Mikitani, will
buy call and messaging app provider Viber Media Inc for $900
million in a deal that would more than double the number of
users in its digital empire.
Rakuten offers services from financing to shopping to online
video on its e-commerce platform, the largest in Japan. But in
the face of a shrinking population and weak consumer spending at
home, Mikitani is trying to re-invent Rakuten as a one-stop-site
for a global audience.
Privately held Viber, run from Cyprus by Israeli
entrepreneur Talmon Marco, will add 300 million users to
Rakuten's existing 200 million users, Mikitani told reporters in
"This acquisition... will take Rakuten to a different
level," said Mikitani, who is also the company's chief
executive. The all-cash deal was announced after Rakuten
reported an 80 percent jump in its 2013 operating profit.
"Developing this messaging system on our own would have been
impossible," he added, saying Rakuten users could, for example,
use Viber's instant messages to contact an online store while
considering a purchase.
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.
Its chief executive Marco told the same media conference
Rakuten's acquisition would help his company become a platform
for digital content, not just a provider of free voice calls and
A plethora of messaging apps, including the likes of Viber,
are seeking to capitalise on the appeal of their free services,
especially in emerging markets.
Viber is funded from the pockets of its founders and several
private investors from the United States. It competes with
instant messaging apps such as WeChat, a unit of Chinese
Internet firm Tencent Holdings Ltd, U.S. rival
WhatsApp, and Line, owned by Korean company Naver Corp
Viber 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.
The acquisition by Rakuten is expected to be completed by
the end of March, both companies said.
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 Inc
and Amazon.com Inc in Europe, where
recession-hit retailers are struggling to tempt clients to
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.
Strong profit growth has contributed to its spending
In the 12 months ended Dec. 31, Rakuten's operating profit
jumped 80 percent to 90.2 billion yen ($882.89 million), marking
a sixth consecutive year of record earnings, though lagging the
average 99.9 billion yen projected by 18 analysts polled by
Thomson Reuters Starmine.
Net profit doubled to 43.5 billion yen, while revenue rose
30 percent to 518.6 billion yen.