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Japanese E-commerce Firm Rakuten Buys Israeli Company Viber For $900 Million

Chairman and Chief Executive of e-commerce operator Rakuten Inc Hiroshi Mikitani (L) and Viber Media Chief Executive Talmon Marco hold their smartphones as they pose during a news conference in Tokyo on February 14,

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In a straight replay of the eBay purchase of Skype several years ago, Japanese e-commerce group Rakuten is buying 100% of internet telephony and messaging company Viber for US$900 million.

Viber is a global messaging and VoIP (voice over internet protocol) service operator which has approximately 280 million registered users worldwide, and over 100 million monthly active users. For US$900 million then, Rakuten is paying a little over $3 per user acquired.

Viber apps on smartphones allow users to talk on the phone, and through its high quality ancillary functions to also send and receive both messages and images Viber has succeeded to date by offering a hybrid range of services not often found on competing platforms.

Viber has demonstrated a rapidly growing numbers of users, especially in emerging countries, and Rakuten decided to acquire it to strengthen its own existing global platform by adding Viber’s broad range of customers to Rakuten’s E-Commerce and digital content services.

Rakuten has already developed its own “Rakuten Ecosystem” and its members are able to access a range of services through common ID numbers and their successful online Rakuten “Super Points” rewards program.

Viber’s own fun approach to messaging and high quality VoIP services is something Rakuten believes should fit well with its own Internet service offering. Rakuten’s “Shopping is Entertainment” philosophy is the basis for their comprehensive and engaging online platform used every day by their members.

Rakuten has been on the acquisition trail for a while, buying ebook firm Kobo, TV show platform Viki and video streaming platform all in the last couple of years. Rakuten has invested in Pinterest and runs a number of travel and financial web services as well.

Rakuten may want to now apply Viber as a gaming platform as well. Their Chief Excutive Hiroshi Mikitani said in a statement:

Viber delivers the most consistently high quality and convenient messaging and VoIP experience available. Additionally, 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. 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.”

The combination of the two companies also opens major new potential markets for Viber itself, through the Rakuten Group’s own roughly 200 million existing global members.

Whilst Viber is registered in Cyprus it is owned and run by Israelis, and led by CEO Talmon Marco who has joint Israeli and American citizenship. Marco also has 11.4% of the ownership, with Gilad Shabtai’s family being the controlling shareholder at 55.2%.

These will all now cash in big time, and the transaction is expected to close by the end of the first quarter of 2014. Let us hope Rakuten enjoys its ownership of viber more than eBay did with Skype, who of course ended up selling it again, to Microsoft, for less than they paid for it.



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