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Rakuten buys Viber chat app for $ 900 million

Rakuten buys Viber chat app for $ 900 million

Japanese company Rakuten buys Viber chat app for $ 900 million to expand its digital empire
Japanese e-commerce giant Rakuten, controlled by billionaire Hiroshi Mikitani, will buy the messaging and calling app provider Viber Media for $ 900 million, in a deal that could more than double the number of users in its digital empire.

On its e-commerce platform - the largest in Japan - Rakuten offers various services, from financing for purchases to online videos. However, in the face of declining population and weak consumption in Japan, Mikitani is trying to reinvent Rakuten as a unique site for a global audience.

The private company Viber, run from Cyprus by Israeli businessman Talmon Marco, will add 300 million users to Rakuten's current 200 million users, Mikitani told reporters in Tokyo.

"This acquisition will take Rakuten to a different level," said Mikitani, who is also CEO of the company. The cash deal was announced after Rakuten reported an 80% increase in its 2013 operating profit.

"Developing this messaging system on our own would have been impossible," he added, saying that Rakuten users could, for example, use Viber's instant messages to contact an online store while deciding whether to make a purchase.

Viber is one of the top five most downloaded calling and messaging apps for smartphones, with the United States, Russia and Australia among its largest markets.

Marco, its CEO, said at the same press conference that the acquisition of Rakuten would help his company become a platform for digital content, rather than just a provider of free voice calls and messages.

A host of messaging apps, including those similar to Viber, are trying to capitalize on the appeal of their free services, especially in emerging markets.

Viber has been funded with money from its founders and several private investors in the United States and competes with instant messaging apps such as WeChat (a unit of Chinese internet company Tencent Holdings), US rival WhatsApp and Line, owned by the Korean company Naver.

Viber recently launched an instant messaging application for personal computers that allows users to make voice calls from their mobiles to other Viber users and unregistered mobiles, making it a rival to Skype.

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

Source: http://www.reuters.com/article/2014/02/14/us-rakuten-viber-idUSBREA1D07M20140214

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