Buy.com, a leading online retailer has been acquired by a Japanese e-commerce company Rakuten. The transaction price is believed to be $250 Million and the amount will be paid in cash. Rakuten, which many people outside of Japan are unfamiliar with, is the largest e-commerce portal in Japan and one of the largest portals in Asia. Annual revenues at Rakuten run about $3 Billion and 33,000 merchants use the website to sell their stuff.
This acquisition will help Rakuten expand globally and be more competitive to online e-commerce giants like eBay and Amazon. Rakuten has acquired several internet companies outside of Japan in the last few years including LinkShare for $425 Million. There is absolutely no question about the direction of the firm, i.e. global expansion. Rakuten already is very competitive with the Japanese businesses of sites like Amazon, eBay and Google.
Buy.com had tried to go public in 2000 but after suffering through the dot-com era, founder Scott Blum took the company private again in 2001 after buying ti bank from SoftBank for 17 cents a share. Another reason why Buy.com will be in better hands now is the backing Rakuten gets from its CEO Hiroshi Mikitani who is the sixth richest person in Japan. With a strong backing and a better business model, Buy.com can really take over competitors like OverStock.