Japan's diversified Internet portal Rakuten has agreed to acquire Internet-marketing firm LinkShare Corp. for $425 m

Japan's diversified Internet portal Rakuten has agreed to acquire Internet-marketing firm LinkShare Corp. for $425 million in cash. The development is being termed as one of the biggest forays by a Japanese Internet company into the US.

Published: 06 Sep 2005

Japan's diversified Internet portal Rakuten has agreed to acquire Internet-marketing firm LinkShare Corp. for $425 million in cash. The development is being termed as one of the biggest forays by a Japanese Internet company into the US.

Rakuten claims to be Japan's most diversified Internet portal with the
number one sites in Japan for on-line shopping, travel, golf
reservations, community and greeting cards.

Internet Capital Group, Inc. announced that its partner company,
LinkShare Corporation, and Rakuten, Inc. have entered into a merger
agreement. The transaction is expected to close within four to six
weeks, subject to customary closing conditions.

"ICG's share of the cash proceeds is estimated to be $150 million.
Approximately ten percent of the proceeds will be escrowed for one year.
Upon closing, ICG will record a gain of approximately $100 million, net
of income taxes of approximately $19.0 million. The release of any
proceeds from escrow in 2006 will result in an additional gain," said an
official statement.

"LinkShare's performance-based marketing expertise across affiliate,
search and e-mail capabilities provides Rakuten with an excellent first
step to launch our U.S. operations and continue our international
expansion," said Hiroshi Mikitani, Rakuten chairman and chief executive,
in a statement. "We can leverage LinkShare's client relationships and
technology advantages worldwide, so that LinkShare will be able to
achieve significant growth in the future."

In 2004, approximately 2% of U.S. retail e-commerce, or $1.4 billion,
passed through the LinkShare network. LinkShare clients include J.C.
Penney, 1-800-Flowers.com, American Express, Avon Products and Dell.

The statement also said Rakuten plans to use LinkShare as a "base" for
further overseas acquisitions and expansion into new businesses.
According to Rakuten's web site, LinkShare earned $10 million in profit
on $32 million in sales in its latest business year.

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