Rakuten books space in the e-reader market by acquiring Kobo

November 8, 2011 05:10 PM

Japan-based Rakuten Inc. keeps on buying up companies it believes will transform it into a global online retailer powerhouse.

This time the merchandising category is the lucrative electronic books and digital content market and the acquisition is Kobo Inc., the e-book reader maker and content  provider that’s also a unit of Toronto-based retailer Indigo Books & Music No. 177 in the Internet Retailer Top 500 Guide.

Rakuten, which acquired U.S. e-retailer in 2010 will acquire Kobo for $315 million in cash.

 “We are very excited about this next step and Kobo provides one of the world’s most communal e-book reading experiences with its innovative integration of social media, such as Facebook and Twitter; while Rakuten offers Kobo unparalleled opportunities to extend its reach through some of the world’s largest regional e-commerce companies," says Rakuten CEO Hiroshi Mikitani.

Kobo, which in July launched its first overseas venture in Germany, agreed to be acquired because a bigger organization could help Kobo diversify and grow quicker against bigger rivals such as Barnes & Noble, which makes and markets the Nook e-reader, and, which develops and sells the Kindle e-reader.

“We share a common vision of creating a content experience that is both global and social” says Kobo CEO Michael Serbinis. “Rakuten is already one of the world’s largest e-commerce platforms, while Kobo is the most social eBook service on the market and one of the world’s largest eBook stores with over 2.5 million titles. This transaction will greatly strengthen our position in our current markets and allow us to diversify quickly into other countries and e-commerce categories.”

Kobo was increasingly an also-ran in the U.S. e-book reader market with only 6% market share in April 2011, according to a survey by e-commerce software firm Elastic Path reported by research firm eMarketer. But Kobo commanded 36% of the market in its home country of Canada in August 2011, according to a survey by market research firm Ipsos.




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