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Rakuten Feels Viber's Messaging Vibe for $900 Million

Rakuten Feels Viber's Messaging Vibe for $900 Million
By Jennifer LeClaire

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Viber is not like Skype or WhatsApp in terms of popularity, but Rakuten felt it could be a platform on which it could build monetizable services. There’s an interest in retailers like Tokyo-based Rakuten having channels of communication with their customers. Rakuten bought Buy.com in the U.S., so that may part of its interest in buying Viber.
 

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Viber has been snapped up by Rakuten for nearly $1 billion. If those names sound foreign to you, that’s because one of them is from Japan and the other is a startup that is growing in the shadows of Skype and WhatsApp.

Based in Tokyo, Rakuten is one of the world’s largest Internet services companies. Viber Media is a startup that has gained fast momentum in the mobile messaging and VoIP space. Rakuten picked up Viber for $900 million, following other digital content acquisitions in Kobo, Wuaki.tv and Viki.

“Viber has introduced a great sticker market and has tremendous potential as a gaming platform. Simply put, Viber understands how people actually want to engage and have built the only service that truly delivers on all fronts,” said Rakuten Chairman and CEO Hiroshi Mikitani. “This makes Viber the ideal total consumer engagement platform for Rakuten as we seek to bring our deep understanding of the consumer to vast new audiences through our dynamic ecosystem of Internet Services.”

Feeling Viber’s Vibes

As people continue to shift from traditional content and communications platforms to mobile applications, Viber has emerged as one of the most popular mobile communications services in the world. Viber boasts a rapidly growing global user base of 300 million registered users.

Rakuten believes Viber complements its digital strategy. The company is aiming to become the world’s leading Internet services company and is betting that Viber can help the company penetrate new markets with multiple digital content offerings, in combination with its e-commerce and financial services platforms.

Rakuten has 40 different services, qualifying it as one of the world’s most robust and dynamic Internet services ecosystems centered around a unified ID membership database that features the online Rakuten Super Points rewards program.

What’s in it for Rakuten?

Rakuten said Viber’s approach to messaging and high quality VoIP services is a perfect marriage with its digital content offerings and its “Shopping is Entertainment” philosophy. The company also expects the deal to unlock new potential markets for Viber through its roughly 225 million global members.

Rakuten ventured into global digital content in 2012 with the acquisition of Kobo Inc., one of the world’s fastest-growing e-reading services. In 2012, Rakuten acquired Wuaki.tv, a Europe-based video-on-demand and streaming service, which recently began its international expansion beyond Spain by offering customers in the UK its movie titles catalogue and hybrid payment model. More recently, in September 2013, Rakuten acquired borderless digital content platform, Viki, which now reaches 65 percent of its 30 million monthly users through mobile devices.

So where does Viber fit into this mix? We caught up with Ross Rubin, a principal analyst at Reticle Research, to get his take. He told us Vibe is not like Skype or WhatsApp in terms of its popularity but clearly the company felt that it could be a platform on which they could build future monetizable services.

“There’s clearly an interest in retailers having channels of communication with their customers. Rakuten is a large retailer based in Japan,” Rubin said. “Rakuten bought Buy.com here in the U.S., so that may be part of their interest. In addition, there’s a potential viral marketing play where they could send alerts to customers as they interacted or came close to retailers in the physical world.”
 

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