Viber Chat App Fetches $900 million

Rakuten Inc., an E-commerce giant from Japan, has made the announcement of purchasing Viber Media Inc., the parent company of the calling and messaging app. The company has made a deal to acquire the app for about 900 million and this deal is expected to double the users of app. Viber chat app is one of top 5 most downloaded and used smartphone phone call and messaging apps and its biggest markets include names like Australia, Russia and the United States. Rakuten is regarded as the largest e-commerce platform in the whole of Japan and offers services such as shopping to financing to online video.

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However, in the face of weak consumer spending at home and a shrinking population, Miktani is making an effort to re-invent Rakuten and turn it into a one-stop-site for a worldwide audience. Viber is held privately and is run from Cyprus by Talmon Marco, an Israeli entrepreneur. According to Miktani, the acquisition will allow Rakuten to add about 300 million users to the existing 200 million users of the company. Miktani is also the chief executive officer of the company and he said that purchasing Viber would help taking Rakuten to a whole new level. This all-cash deal was announced by the company after it had proudly reported an 80% increase in its operating profit in 2013.

The CEO also added that it would have been impossible to develop this messaging system on their own and also said that Rakuten could use the instant messaging service of Viber for communicating with an online store while thinking of making a purchase. This is just one example of how useful Viber chat app could be for Rakuten. Marco, the Chief Executive of Viber made a statement at the same media conference and said that the acquisition of Rakuten would be extremely beneficial for his company as it would allow it to become a platform for digital content and not simply a provider of free messages and voice calls.

There are a plethora of messaging apps, including ones similar to Viber, which are hoping to capitalize on their appeal of free services in this emerging market. The pockets of its founders fund Viber along with several private investors in the United States. This particular app is in direct competition with other apps such as the WeChat, which is a part of the Chinese internet firm called Tencent Holdings Ltd, Line, which is owned by Naver Corp, a Korean company and also US rival Whatsapp.

Recently, an instant messaging app had been launched by Viber for personal computers, which enables users to make outgoing mobile calls to other users of Viber chat app and even non-registered users and thus, making it a competitor of Skype. Both companies said that the acquisition is expected to be completed by the end of March 2014. When comparing sales figures, the e-commerce platform of Rakuten called Rakuten Ichiba is the sixth largest in the whole world. Strong growth in profit has given the company spending firepower.