Sept. 3 (Bloomberg) -- Rakuten Inc., controlled by billionaire Hiroshi Mikitani, said it agreed to buy streaming video service provider Viki Inc. as the Japanese Internet retailer seeks to expand into new digital offerings.
The companies see opportunities for Viki to boost revenue by selling more advertising against its video content, they said in a statement yesterday, without giving the value of the deal. Viki has offices in San Francisco, Singapore, Seoul and Tokyo.
Rakuten in the past five years has announced more than $1.6 billion worth of purchases including stakes in social network operator Pinterest Inc. and digital book seller Kobo Inc. as part of its strategy to compete with rivals such as Amazon.com Inc. Mikitani, who is also the chief executive officer of Rakuten, in an October interview said the company aims to have 70 percent of sales transactions overseas by as early as 2020.
The acquisition helps Rakuten in its goal to gain more visibility and reach overseas users, Hiroshi Naya, an analyst at Ichiyoshi Research, said by phone today.
’’As a comparison with Amazon, in foreign countries, Rakuten is too small to compete with Amazon,’’ said Naya. “However, it aims to expand and the acquisition is one of its steps.”
Rakuten rose 0.3 percent to 1,196 yen as of 12:31 p.m. in Tokyo trading. The broader Topix index jumped 2.5 percent.
Amazon has also invested in building out its digital media business, which delivers books, music and shows to its Kindle hand-held devices. In September 2012 it reached a deal with pay-television channel Epix to offer films such as “The Hunger Games” on the Amazon Prime Instant Video service.
Rakuten last year completed the acquisition of Canada-based e-reader seller Kobo for $315 million.
The content business “is close to digital books, and has something common in marketing,” said Masakazu Itoi, an analyst at Tokyo-based TIW Inc.
Technology publication AllThingsD earlier said on its website that Rakuten was acquiring the Viki video site for $200 million. Naoki Mizushima, a spokesman for Tokyo-based Rakuten, declined to comment on the acquisition price.
Rakuten’s purchases include online businesses including U.S. retailer Buy.com Inc., French electronics seller PriceMinister S.A. and Brazil’s Ikeda. Mikitani’s net worth is estimated at $7.1 billion, according to Bloomberg Billionaires Index.
The company’s flagship shopping portal, Rakuten Ichiba, connects merchants to customers shopping for products such as toys, electronics and pajamas. Its English-language website also offers Japanese goods to overseas customers.
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