Wednesday, November 09, 2011

KOBO Steps Up To Go Global

In a move clearly aimed at the international market KOBO has been acquired by Japanese e-commerce company Rakuten for a reported $315 million in cash. The ebook world todate has been very US driven, but this could change as all the major players now vie for the other markets where they all wish to be number one. This change is both inevitable and significant and will squeeze those who do not have the reach or the commitment.

Founded in 2009, Kobo has grown from its roots in Indigo into a formidable eReaders platform and broken out of its Canadian roots to move internationally with partnership arrangements first with the ill fated Borders in the US and more recently with Fnac in France and WHSmiths in the UK. It is widely regarded as the strong outsider in the market behind Amazon, Google and Apple and in the uS Barnes and Noble. Kobo claim 5.6 million reader worldwide.

Kobo claim that the company will maintain its headquarters, management team and employees and will continue to be run from Toronto and see the acquisition as an enabler which will allow with them to grow faster and complete internationally.

Rajuten has been buying up ecommerce companies and spending heavily. In 2010 they bought French e-commerce company PriceMinister and German online shopping mall, Tradoria. In 2011 they bought e-commerce companies Ikeda (Brazil), and Rajuten is now one of the top global e-commerce companies by revenue and is clearly building an end to end platform which not only services the consumer but also manages important media content, giving it both higher margins and tighter control over media.

This move should open up significant global opportunities for Kobo in markets that they would have struggled to penetrate alone. It does however raise questions on how Barnes and Noble will break out of the US and what options are left for chains such as Waterstones in the UK.

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