Rakuten to buy instant messaging app Viber for $900 million

Viber is e-commerce giant Rakuten's latest acquisition in its aim to be the world's No. 1 Internet services company

Japan's Rakuten will acquire instant messaging and calling app developer Viber Media for $900 million, the e-commerce giant said Friday, highlighting its moves to penetrate new markets.

Rakuten's purchase of the messaging and VoIP company follows its acquisitions of Canada's e-book platform Kobo, Spanish video service Wuaki.tv, and Viki, a digital content platform.

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The company aims to be the world's number one Internet services company, and buying Viber complements its strategy in the digital space.

Founded by CEO Talmon Marco, Viber adds some 300 million registered users to Rakuten Group's user base, which numbers about 225 million across its 40 services around the world.

Viber has rocketed in popularity as a potential rival to Skype, announcing 100 million worldwide users in September 2011, and then more than 200 million in May of 2013. 

"Undoubtedly messaging is a crowded market, there's a lot of competition out there and people do jump onto the next biggest thing," said Paolo Pescatore, an analyst with CCS Insight. "It is very important in this market to have a strong presence, and one of the ways you can do that is through acquisitions. I think for Rakuten and other online giants, it makes perfect sense for them to move into these areas."

While recalling how eBay acquired Skype in 2006 before selling most of it three years later to a group of investors, IDC mobility analyst John Delaney said Rakuten's acquisition of Viber seems a better fit for the two companies. "Rakuten's rationale for buying Viber seems simpler and more direct. It looks like Viber is being bought for its user base, to whom Rakuten intends to sell digital goods such as games, emoticons and tokens," Delaney said.

"Rakuten will probably use a similar model to the one developed by, among others, the Japanese instant messenger service Line. This fits in neatly with Rakuten's larger strategic objective of increasing the size of the international target market for its digital goods. On the basis that the simplest ideas tend to be the most successful, this bodes well for a better outcome for this acquisition than in the eBay-Skype case."

The Viber app is available for iPhone, Android phones and tablets, Windows Phone, BlackBerry, Windows, Windows 8, Mac OS X, Linux, Symbian, Nokia S40 and Bada devices over 3G/4G or Wi-Fi connections. Besides providing Rakuten access to new markets, the deal will offer new potential markets for Viber through Rakuten users.

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