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Rakuten to buy video streaming provider

Bloomberg

Rakuten Inc., controlled by billionaire Hiroshi Mikitani, said it has agreed to buy streaming video service provider Viki Inc. as the 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 Monday, 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, said last October that 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 Tuesday.

“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.”

Amazon has also invested in expanding its digital media business, which delivers books, music and shows to its Kindle hand-held devices. Last September 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-book 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.

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.