News from Tokyo is that Japan’s largest e-commerce company, Rakuten, Inc., will purchase Cyprus-based application maker Viber Media. Rakuten is looking to expand its overseas region. With the acquisition of Viber’s 280 million global customer base in 193 countries, you can see how this is a move in that direction.
If you take a look at Rakuten’s holdings so far, you will notice that it has a hand in e-commerce, a baseball team, a web-based travel service, as well as an Internet bank. The inclusion of Viber’s offerings will add Internet-based calls on smartphones and computers, a service that is similar to Skype, as part of its offerings.
In a recent interview with re/code, Hiroshi Mikitani, who is co-founder and CEO of Rakuten, said “This is a no-brainer. Messaging apps are taking over the world and while search is one of the strongest platforms, what is happening in communications is very, very important.”
Mikitani added, “We have content and games and commerce and markets and services, but they need the ability to reach out and talk to customers wherever they are. With this, we can make buying more secure, but also more human.”
According to the Wall Street Journal, Rakuten will pay $900 million for Viber. This purchase would double its worldwide reach, even though Viber is not currently making money. The company logged a net loss of $29.5 million with revenue of $1.5 million in 2013.
Mikitani believes that there is a huge potential for growth, which is why his company is willing to pay the large price tag now. He said, "If we didn't buy [Viber] now, I don't think we could have bought it later, it's growing so fast."
It seems that this is not Rakuten’s first venture into expanding its market on a global level. The company has been acquiring businesses across the sea from Singapore to Spain. It has also acquired the Canadian e-book company Kobo in 2012. So far Rakuten has spent billions on these acquisitions.
Rakuten also has a hand in the United States. It has made a major investment in the U.S. online scrapbooking site Pinterest. This happened around the same time as its Canadian purchase.
Unless something comes up, the deal will be completed sometime next month. A statement from Rakuten reads, "As our company seeks to become the world's number one internet service company, a number of new digital contents that accompanies this purchase... will enable us to explore a new market."
One of the reasons for this constant push to acquire companies outside of Japan is that most of its revenue and its millions of members are in Japan. Unfortunately, this is where its dominance has come under increasing threats from other internet giants. These include Amazon and Yahoo Japan. It is also facing a shrinking domestic market in a country with a rapidly ageing population.
Edited by
Cassandra Tucker 
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