Japan Internet Giant Acquires Kobo EBook

Posted on 13 November, 2011 by MOVEHUT

Rakuten, who specialises in internet sales has bought eBook firm Kobo in a multi-million pound deal.

The firm already sells an eBook in Japan, which is manufactured by Panasonic, but to secure their place as a top seller of the device, and to open new doors in international markets, they needed to expand their portfolio. Pierre Kosciusko-Morizet, Executive at Rakuten, expressed: “We feel that an ebook reader will ultimately not be only about selling books. It’s about potentially selling other digital goods and it’s also about being in consumers’ homes with a hardware device.”

Rakuten also owns a popular online retailer Play.com, which will soon start selling the device. This news will not go down well with a major retail commercial property, WH Smith, who is one of the very few that already stocks the eBook. However, Mr Kosciusko-Morizet was optimistic about the competition: “We think the price battle is going to be quite strong and so it’s even more important to be strong in that battle.”

“We feel that being only online makes it difficult to be a big player in the market, and moreover it is probably a market where you need to be one of the top three or two players,” Mr Kosciusko-Morizet added.

The company also operates in a
diverse range of sectors include:

  • Banking
  • E-commerce
  • Travel
  • Sports and media.

The deal was reportedly worth an astonishing £198 million and will help build Kobo’s book themed social network, which can be used to enhance brand loyalty, as Mr Kosciusko-Morizet,  put across: “Definitely the ebook market is not just for ebooks, it probably means going towards other stuff.”

However, with the rise of the eBook, sadly commercial properties selling physical books are on the decline. Since 2006, approximately 400 independent books stores have had to permanently close their doors. Speaking of the decline, Tim Godfray, Chief executive Officer from The Booksellers Association, expressed: “At a time when literacy is an issue and libraries are under threat from government cuts, we need to build a coalition of publishers, government and consumers to provide opportunities for the passionate and creative entrepreneurs who run bookshops on our High Streets to thrive.”

Since 2010, sales of EBooks have increased by 318 per cent with more books being made downloadable as well as being available in the physical format, which can be purchased from a commercial property. However, to the delight of Rakuten, experts predict that by 2012, around 50 per cent of books will be made available to be downloaded to use on an eBook.

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