Rakuten buying Ebates for US$1b

RAKUTEN, the e-commerce giant that acquired Singapore video startup Viki a year ago for US$200 million (the biggest known buyout for a startup here), on Tuesday announced its newest acquisition as part of plans to expand its digital offerings beyond home country Japan.

This time, it will be buying San Francisco-based Ebates, a shopping website that rewards shoppers with cash back on purchases and provides them with access to coupons, promotions and special deals, at more than 1,700 retailers, including Amazon, Best Buy and Macy's.

The acquisition amount is US$1 billion, slightly higher than the US$900 million it paid for Cyprus-based free-messaging platform Viber in February this year.

After Viber, Rakuten announced two additional acquisitions - both at undisclosed amounts - of Slice, a US-based e-commerce app, and AIP, a Tokyo-based online market research firm, making the buyout of Ebates its fourth this year.

Together, Rakuten and Ebates will create the world's most attractive and innovative membership-based, loyalty-driven marketplace for consumers, Rakuten said in a statement.

Ebates, whose cash-back system will complement Rakuten's existing loyalty programme Rakuten Super Points, will also provide Rakuten with a new entry point into the US e-commerce market, said observers.

Said Rakuten's founder and chief executive officer Hiroshi Mikitani: "The combination of Rakuten and Ebates is entirely unique and will revolutionise e-commerce. It will also give our members the greatest incentives to keep shopping."

According to sources, Ebates will continue to operate from San Francisco following the deal's closure, which is expected in about a month's time.

Meanwhile, Rakuten's rival e-commerce website Alibaba has unveiled plans to raise up to US$24.3 billion as it lists on the New York Stock Exchange later this month. Alibaba's closely watched listing is believed to be the largest in the US ever, surpassing Visa's US$19.7 billion in 2008.