Japanese e-commerce portal Rakuten will acquire LinkShare, a performance-based online marketing firm, for $425 million.
The deal, expected to be complete in four to six weeks, will constitute the first foray into the U.S. Internet market for one of Japan’s highest profile Web companies. Rakuten runs a business empire that includes an online shopping site with links to more than 13,500 vendors, a satellite television service and highly trafficked Internet sites offering services from golf tee times to stock trading to travel reservations. The company is led by CEO Hiroshi Mikitani, a 40-year-old celebrity entrepreneur who also owns a soccer team and last year won the right to form the first new team in Japan’s pro baseball league in 50 years.
LinkShare runs one of the most extensive pay-for-performance affiliate networks on the Internet, linking Web publishers with online merchants. Clients include such big brand names as Avon, Nordstrom, Land’s End, Dell, American Express, AT&T, Lillian Vernon and 1-800-Flowers.com.
The company also offers outsourced tracking and reporting technology for affiliate programs. Its most recent product launch was the Athena affiliate registration and management system. Unveiled in August, Athena helps Web marketers validate and monitor new and existing affiliates. LinkShare said the new platform is a big step toward reducing the problems of fraud and invalid transactions that have cropped up in many affiliate channels in recent years.
“LinkShare’s performance-based marketing expertise across affiliate, search and e-mail capabilities provides Rakuten with an excellent first step to launch our U.S. operations and continue our international expansion,” Mikitani said in a statement accompanying the announced purchase. “We can leverage LinkShare’s client relationships and technology advantages worldwide.”
Rakuten reports its current market value at $9.7 billion. Until now LinkShare has been closely held by investment companies Mitsui, Internet Capital Group and Comcast interactive Capital. According to Rakuten, LinkShare earned $10 million on sales of $32 million in its most recent fiscal year. The deal announcement said senior LinkShare management, including CEO Stephen Messer and president and COO Heidi Messer, will remain in place after the purchase.
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