February 14, 2014, 11:45 AM

Rakuten buys mobile messaging company Viber for $900 million

Viber allows members to chat and talk for free on mobile, as well as purchase and send each other digital stickers. Rakuten’s CEO says it has “tremendous potential” to become a gaming platform, too.

Lead Photo

Rakuten chairman and CEO Hiroshi Mikitani

Rakuten Inc. has purchased mobile chat and app platform provider Viber Media Inc. for $900 million, the retailer announced today. Viber provides free chat and voice-over- Internet (VoIP) services to consumers. It also allows users to purchase and send digital versions of cartoon-like stickers, similar to emoticons in chat messages, to one another. Additionally, Viber has “tremendous potential” as a mobile gaming platform, Rakuten chairman and CEO Hiroshi Mikitani says.

“Simply put, Viber understands how people actually want to engage and has built the only service that truly delivers on all fronts,” he says. “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.”

Viber grew its user base by 120% in 2013, to 300 million, Rakuten says. Consumers can use the technology via the smartphone operating systems for Android, iPhone, Windows Phone, BlackBerry, Nokia and Bada (a smartphone platform from Samsung Electronics Co. Ltd. that works on a wide range of devices) or via Windows 8 or desktop applications, according to Viber.

“Viber’s impressive global subscriber growth and overall penetration was a significant part of the decision to acquire the company,” a Rakuten spokesman says. “Viber will gain access to markets in which it does not currently have strong penetration, while Rakuten will benefit by gaining access to over 277 million new prospective Rakuten users in markets where Viber has an established presence, such as Western Europe.”

Rakuten operates the largest online shopping portal in Japan and is the No. 2 e-retailer in all of Asia by sales according to the Internet Retailer’s Asia 500. The company acquired U.S. online discount retailer Buy.com in 2010. It later renamed the retailer Rakuten Shopping and converted it into an online marketplace that hosts other merchants’ shops but does not sell on its own behalf, in the model of Rakuten Japan.

Rakuten has been building out its digital services over the last two years, starting with its acquisition of e-reader and e-book provider Kobo Inc. for $350 million in 2012. Since then, it has also bought two streaming video services, Spanish Wuaki.tv and Palo Alto-based Viki Inc. Today, Rakuten offers 40 Internet services associated with its Rakuten Super Points rewards program, which has roughly 225 million members worldwide, the company says. With Viber, the retailer will bring many of those services together onto one platform with single login for members, the Rakuten spokesman says. “The acquisition also illustrates a fundamental shift in Rakuten’s strategic direction, which is mobile-first,” he adds.

“This combination presents an amazing opportunity for Viber to enhance our rapid user growth in both existing and new markets,” says Viber CEO and founder Talmon Marco.

The management team for Viber, which is based in the United States and has offices in Cyprus, Israel and Belarus, will join Rakuten, the spokesman says. The retailer will decide about the rest of the employees as the deal goes forward.

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