Rakuten versus SoftBank: the battle of two giants of the Japanese web

by bold-lichterman

SoftBank buys the Finnish Supercell, and multiplies the acquisitions …

1.53 billion dollars (or 1.13 billion euros): this is what the Japanese will have spent SoftBank – specializing in telecoms, digital and e-commerce – to acquire 51% of the capital of the Finnish company Supercell, publisher of the games “Clash of Clans”, available on iPhone and Android, and “Hay Day”, whose turnover is close to 180 million dollars. It must be said that it generates 2.4 million dollars in daily sales thanks to its products.

This is the first transaction exceeding $ 1 billion in the mobile phone games sector since Electronic Arts’ takeover of PopCap in 2011 for $ 1.3 billion.

SoftBank, 3rd mobile operator in the world

SoftBank, which is one of the largest telephone operators in the Land of the Rising Sun, has been stepping up external growth operations recently. Among the companies in which it owns shares we find Yahoo! Japan of course, but also e-commerce giants like the Chinese Ali Baba or the American Gilt Group, advertising agencies with CreativeBank or internet broadcasting specialists with Ustream.

But SoftBank is increasingly seeing its future beyond its borders and outside Asia by expanding its activities in the United States and Europe. Before the Finnish Supercell, SoftBank took a majority stake in the American operator Sprint whose operation was completed in July 2013 allowing it to become the third largest mobile operator in the world, the largest operation carried out by a Japanese firm abroad.

The iconic Masayoshi Son

It must be said that Masayoshi Son, the founder of SoftBank in 1981, also known as an all-out investor in the internet and telecommunications, is expanding its activities beyond its traditional borders: in relation to a declining Japanese demography, and the will to be global.

ofrbs-usa-sprint-softbank-20130512_paysage360The one who constitutes the third largest fortune in the country with more than 9 billion dollars, according to the American magazine Forbes, and has more than 1.9 million followers on Twitter, therefore pursues his goals at all costs and seems ready to put it into it. the price, including when Standard & Poor’s downgrades SoftBank’s rating to speculative category because of the indebtedness caused by the acquisition of Sprint.

Emblematic figure in Japan, the boss of SoftBank donates $ 120 million in 2010 on behalf of the company to come to the aid of the victims of the earthquake which shook the country, in addition to a contribution from his personal funds. Following the disaster, he did not hesitate to move on the political field by calling on the Prime Minister at the time to contest the too rapid restart of certain nuclear power plants.

In front of him is Hiroshi Mikitani, CEO of Rakuten, the largest e-commerce platform in Japan with 50 million users, and rival of Masayoshi Son. [voir notre interview de Hiroshi Mikitani en 2012]

Hiroshi-Mikitani-rakuten-550x355A rivalry that was reinforced when Yahoo! Japan, partly owned by SoftBank, has decided to lower the monthly fees for merchants registered on the portal. An aggressive policy that would have resulted in more than 10,000 subscription requests from traders and 16,000 individuals, sometimes to the detriment of Rakuten, led by Mr. Mikitani.

However, the two leading men of the Japanese internet know each other well, and have been since the 1990s. when he advised the founder of SoftBank while working at the Industrial Bank of Japan.

By both taking an interest in the e-commerce sector, the two companies are now more and more often head-to-head, and if SoftBank seems to be increasing the number of external outlets, Rakuten is also accelerating its acquisition policy with Buy.com for 250 million dollars and the French PriceMinister for 200 million euros in 2010, the Canadian Kobo, specialist in ebooks, for 315 million dollars in 2011 and, recently, the video platform Viki based in Singapore for an estimated value of 200 million dollars.

The battle is therefore not over in the Japanese internet. After the takeover of Supercell this week, SoftBank confirms that it is in discussions with the American distributor of mobile phones Brightstar with a view to a probable takeover. The transaction could cross the billion dollar mark (730 million euros). Case to be continued.

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