This social-media purchase has ''good vibes'' written all over it

All sushi jokes aside, Rakuten is on a roll.

The Japanese company already owns Kobo e-readers.

And online retailing giant Play.com.

And even the Rakukten Eagles baseball club, former home of New York Yankee’s new pitcher Masahiro Tanaka ( the star of spring-training who threw his first pitches this week in Tampa).

Now comes word that Rakuten has scooped up Viber, the red-hot messaging and video calling app that’s all the rage among global communicators (I know first-hand, because I used Viber to keep in video-touch with my son while he was overseas)

According to Verge, the $900-million purchase may help Rakuten with its ambitious goal of becoming “the world’s No. 1 internet services company.’’ The move, says the report, will give Rakuten

a global user base of more than 300 million users. Viber has seen impressive growth, particular in the Middle East and US, and it’s clear Rakuten wants to take advantage of that for its aggressive goal.

 

With Viber, Rakuten has a lot of competition in a market that’s filling up with messaging and video calling apps. WhatsApp now has more than 400 million monthly users, and Skype has around 300 million users worldwide. Facebook is also a formidable competitor thanks to its more than 1 billion users. Despite all this, Rakuten CEO Hiroshi Mikitani believes Viber “has tremendous potential as a gaming platform.”

 

So become No. 1 is apparently not going to be a cake-walk. Viber faces a powerful rival in fellow another Japanese powerhouse Line. Verge says the app, which is hugely popular in Asia,

 

has doubled its user base to 350 million over the past year, and counts 50 million users in Japan alone. Viber’s popularity in the US, Australia, Russia, and Middle East, will help Rakuten globally, but Asian markets continue to grow thanks to the popularity of chat apps with games and stickers.

 

And as Verge reports, the Viber deal is only the latest in a series of purchases for Rakuten, ranging from

e-reader company Kobo to an investment in social networking site Pinterest. However, Rakuten has been ambitious before, and its plan to beat Amazon in Japan hasn’t really worked out. Rakuten completed its Kobo acquisition in 2012, and Amazon launched its Kindle e-reader in Japan four months later. The Kindle is a top-seller in Japan, and Kobo has struggled to respond. Ratuken also shuttered the retail part of Play.com around a year after acquiring the service. With its latest acquisition, Rakuten will be hoping the same mistakes aren’t repeated in a crowded messaging market.

Photo: Japan’s online shopping giant Rakuten president Hiroshi Mikitani (L) and Cyprus-based application maker Viber Media CEO Talmon Marco pose in Tokyo on Friday.

Credit: AFP PHOTO / Yoshikazu TSUNOYOSHIKAZU TSUNO/AFP/Getty Images

 

Patrick May Patrick May (284 Posts)

With more than 30 years on the front line of daily American journalism, I'm currently a staff writer with the San Jose Mercury News, covering Apple and writing people-centric business stories from Silicon Valley.