Rakuten, considered the biggest online store in Japan, has announced its acquisition of Ohio-based OverDrive and has paid $410 million in an attempt to expand the company's digital content business. The announcement came a week after a $530 million funding round for the U.S. ride-sharing company Lyft, marking Rakuten's newly-intended focus on businesses geared more toward rentals.
OverDrive is a company that caters mostly to U.S. libraries and schools, offering them rental opportunities on its e-books. With the acquisition, OverDrive is expected to enhance Rakuten's own e-book business by expanding its distribution platform, providing over 2.5 million titles and establishing relationships with 30,000 libraries as well as 5,000 publishers.
"OverDrive can be described as a 'sharing economy' business as it shares books," said Takahito Aiki, head of Rakuten's global e-book business.
Rakuten first entered the e-reader ecosystem when it acquired Canadian e-book maker Kobo in 2011 for $315 million. OverDrive, which was founded in 1986, will help the company in providing Kobo owners with more choices, allowing them access to more than 2.5 million titles.
"OverDrive's deep content library and relationships with publishers, libraries, schools and retailers will allow Rakuten to extend our mission of empowerment to new market segments and accelerate the growth of our digital contents business," added Takahito Aiki.
In the latter part of 2014, Rakuten acquired Ebates.com, a U.S. discount shop, for $1 billion.
Rakuten's other high-profile company shopping rendezvous include free messaging app Viber in February 2014, which cost $900 million. The app is seen as key in the company's stride to extend its e-commerce business to mobile devices.
According to Aiki, the acquisition of Kobo forms the first phase of the company's growing e-book business as it will allow consumers to purchase e-books. Likewise, the acquisition of OverDrive sums up the second phase, which will allow libraries and schools rental access to e-books.
Rakuten also plans to increase its share in the U.S. market and could use its acquisition of OverDrive as a springboard in achieving such a goal.
The acquisition also sees the Japanese online retailer's use of the virtual currency bitcoin as a payment option in the U.S. Sites in Austria and Germany are said to follow suit in the near future.
"The integration with Bitnet's platform will make Rakuten one of the largest e-commerce companies in the world to begin accepting bitcoin," said Rakuten. "In addition to offering consumers enhanced security, privacy and convenience, Rakuten merchants will immediately see the benefits of being able to use a digital currency, including instant global reach with no cross-border fees, no price volatility, and no fraud, risk or chargebacks."