• by Shankar Gupta , September 7, 2005

In a bid to move into the United States, Rakuten, one of the largest portal sites and e-commerce players in Japan, will purchase affiliate marketing firm LinkShare for roughly $425 million in cash.

The deal will give Rakuten a foothold in North America to compete with Yahoo!, which is its major competitor in Asia, said LinkShare CEO Steve Messer. "This is a company that's extremely aggressive, and is very focused on investing and growing in the U.S. market," he said.

A major portion of Rakuten's business comes from Rakuten Ichiba--Ichiba meaning "market"--an e-commerce clearinghouse that allows merchants to set up online stores and have Rakuten market and drive traffic to them, similar to Amazon's affiliate stores and Yahoo! Stores. In addition to the e-commerce stores, Rakuten also provides business-to-business services and online auctions.

Rakuten, whose name means "optimism" in Japanese, is one of the more recognized brand names in Japan and East Asia, with a market capitalization of $9.7 billion, and divisions that deal in e-commerce, portal and media, travel, financial services, and professional sports. In fact, Rakuten owns a Japanese baseball team, the Rakuten Golden Eagles. The e-commerce portion of their business that LinkShare will be supporting comprises roughly 30 percent of their revenue, Messer said.