Japanese e-commerce giant Rakuten Inc. announced on Friday that it will buy Viber Media Ltd. for $900 million, thus making the latter’s users believe this service as they know it could come to an end. Thanks to the app, Rakuten users will now jump to 500 million, approaching its aim of becoming “the world’s No. 1 Internet services company.” Last September, the mobile communications service launched a free desktop version of the established app which put it into direct competition with Microsoft’s Skype. The purchase is reportedly a good investment for Rakuten and a lean evolution for Viber, but pessimistic users doubt that the app will preserve its identity.
The Cyprus-based company run by Israeli entrepreneur Talmon Marco has had a growth of 120 percent in 2013 and owns a base of 300 million registered users, while Rakuten only counts 200 million consumers. Although the Japanese e-commerce company’s main businesses are an online shopping mall, an Internet bank and a Web-based travel service, Rakuten started its buying spree with Kobo Inc., an eReading service which offers four million eBooks, Wuaki.tv, a video-on-demand and streaming service, Viki, a digital content platform and now Viber, whose identity as users know it could come to an end.
Rakuten CEO Hiroshi Mikitani issued an official statement with regard to its latest acquisition and mentioned that the app which brings along 300 million to the Japanese company “delivers the most consistently high quality and convenient messaging and VoIP experience available.” At the same time, Mikitani hints at Viber’s “tremendous potential as a gaming platform,” thus feeding the rumors that the app has come to an end as a mobile communication service which offers only the possibility to text and call.
Why Did Rakuten Choose This App?
Rakuten’s outspoken nature with regard to its aim of expanding outside Japan led it on an overseas buying spree, but Mikitani admitted that acquiring Viber “is a totally new strategy that will take Rakuten to a different level.”
At the same time, Marco’s official statement showed that the app and the e-commerce company are on the same wavelength and the former also aims at becoming “the world’s No. 1 communications platform.” Rumors say that Rakuten-Viber pairing could pose a serious threat to Line, which has publicly stated that its milestone for 2014 is to reach 500 million users.
Prior to the merge, the mobile communication service was funded from its founder’s pockets and a few American private investors. Viber’s direct rivals are instant messaging chats like WhatsApp, Line and WeChat, but it has now added Skype thanks to the app’s expansion with the desktop service.
Goldman, Sachs & Co. was the app’s sole financial advisor while White & Case LLP acted as its legal consultant. Mikitani is reportedly set to transform Viber into a fierce competition for rival Line and plans on adding a gaming platform to the service. However, it remains to be seen if the app’s 300 million users will embrace the change or will migrate to Line or other services of its kind. Marco stated during a media conference that the acquisition would help Viber to evolve from a provider of free voice calls and messages to a platform for digital content, but some voices utter that the app’s current identity could soon come to an end.
By Gabriela Motroc