Rakuten Set to Acquire Its Second Video Streaming Site Viki

Kara Swisher at AllThingsD reported that Rakuten is set to acquire Singapore-based video site Viki for $200 million. The acquisition was revealed in an interview with Rakuten CEO Hiroshi Mikitani who has led the retail company further into the content and publishing field with an investment in Pinterest, and the acquisition of e-book platform company Kobo as well as Spanish video rental company Wuaki.

"Our foundation is not limited to e-commerce but an attention to strengthen our ecosystem in Japan and worldwide", Mikitani said. What Rakuten plans to do with Viki has yet to be revealed, after all, the deal was meant to be announced in a few days.

Viki offers videos from various content producers and publishers around the world with a strong support from a community of volunteer subtitlers. According to its most recent data, Viki's top five audience countries are the United States, Canada, Indonesia, Mexico, and Malaysia and its viewers mostly watch Asian and South American TV dramas. Viki's viewers get to watch the shows for free and the company also has distribution/data deals with telcos and with MSN in Southeast Asia.

The service is often compared by many to Hulu which brings regular American TV shows online for American audience and is owned by FOX, Disney, and NBCUniversal, but Viki's content is far more diverse and it focuses on being able to provide subtitles for multiple languages for its content. Currently Viki is growing very fast in Southeast Asia with Indonesia as its leading market followed by Malaysia, Singapore, and The Philippines.

The deal provides a nice exit for Viki's main investors which include Andreessen Horowitz, Greylock Partners, Omidyar Network, Charles River Ventures, and Neoteny Labs. The company also has a number of individual investors and backers, which along with Viki's other investors, have poured in a combined USD 24.3 million since 2010 as detailed in CrunchBase .

Viki is not Rakuten's first acquisition in the field. Last year it Rakuten acquired Barcelona-based Wuaki.tv which provides online video rental service in Spain, much like America's Netflix. In the press release announcing the Wuaki deal, Mikitani said, "We saw synergies in the ambition of both businesses to expand internationally while video on demand extends our digital goods offering". Rakuten has since expanded Wuaki's service across Europe.

In hindsight, Mikitani's statement provided the foundation of Rakuten's strategy in acquiring Viki. With both Wuaki and Viki under Rakuten's wings, the Japanese company is setting up to be one of the world's largest online video distribution players. Whether Rakuten will combine Viki and Wuaki into a unified service, it's not entirely impossible although Rakuten will have to consider Viki's entire viewer base who have always enjoyed watching the videos for free on their desktops and mobile devices.

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