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Rakuten buys mobile messaging service Viber for $900M

Rakuten has been on an acquisition spree "to become the world’s No.1 Internet services company"

Financial trends and news by Steven Loeb
February 14, 2014 | Comments
Short URL: http://vator.tv/n/3511

Mobile messaging is gaining huge ground in Asia. If you want proof of that, all you have to do is look at the meteoric rise of mobile messaging platform Line. There is tremendous opportunity and growth in the region, and Japanese e-commerce giant Rakuten wants a piece of the pie.

Now Rakuten is getting its chance. The company now all set to break into the mobile messaging space by picking up messaging and VoIP company Viber. The deal, which is worth $900 million, was announced on Friday.

Viber is one of the most widely used mobile communications services in the world, with a user base of 300 million people; the deal will more than double Rakuten's existing user base of 200 million. Viber is also growing quickly, seeing its user base go up by 120% in 2013.

"Simply put, Viber understands how people actually want to engage and have built the only service that truly delivers on all fronts," Rakuten Chairman and CEO, Hiroshi Mikitani, said in a statement.

"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.”

Rakuten's self described aims is "to become the world’s No.1 Internet services company." And it has been working toward that goal with a series of acquisitions over the past few years.

They have included eReading service Kobo; Europe-based video-on-demand and streaming service Wuaki.tv; and digital content platform, Viki. Viber, though, is its largest purchase yet.

As for what Viber gets out of this deal, it will also be able to expand to new users and markets, Viber CEO and Founder, Talmon Marco, said. Rakuten currently operates in Asia, Europe, the Americas, and Oceania.

“Rakuten is one of the world’s most important Internet companies. It is truly dominant in its home market of Japan and has been rapidly expanding globally. This combination presents an amazing opportunity for Viber to enhance our rapid user growth in both existing and new markets," Marco said in a statement.

"Sharing similar aspirations with Rakuten, our vision is to be the world’s No.1 communications platform and our combination with Rakuten is an important step in that direction."

The company that is most likely to be affected by this deal is Line, a smartphone app that allows users to make free calls and messages to one another, both nationally and internationally, regardless of which mobile network provider they are using. Users can make  free voice calls on iOS, Windows Phone, and Android over 3G, 4G and Wi-Fi.

The company has been seeing incredible growth of the last two years, reaching 300 million users in November, doubling its size in just a few months. 

The app had 100 million users in January of 2013, 150 million users in April and reached 200 million users in July. The service only launched in June 2011, so it only took two and half years to get to 300 million.

Now, all of the sudden, Line is about to have major competition. It will be interesting to see if Rakuten can successfully slow down its growth.

(Image source: http://balkans.aljazeera.net)


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