Why Rakuten acquired Viki, and what it could acquire next

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News broke yesterday that Japanese e-commerce giant Rakuten acquired Singapore-based video site Viki for a reported $200 million. While people celebrated the big acquisition (something that we haven’t had for a long time in Southeast Asia) it’s not exactly clear why an e-commerce company would acquire a video service like Viki in the first place.

But the answer may be clear if you believe that online video is going to snatch eyeballs from traditional TV channels and also that product recognition through images and video will be used to sell products online one day. If you believe in both trends, then Rakuten’s choice to gobble up Viki seems pretty obvious. It might also explain Rakuten’s previous investment in Pinterest. Here’s why:

Rakuten has already dabbled in image recognition with another Singapore-based company called ViSenze on its Taiwan e-commerce site. How it works is simple: Users take a picture of a product, upload it to Rakuten Taiwan, click search, and find a page full of similar products. Having tested it myself, the service works surprisingly smoothly.

What most people don’t know is that ViSenze technology doesn’t just apply on images; it also works on videos, as confirmed by one of its co-founders. That means it could potentially work well with video site Viki. One example of a possible integration could be that users will be able to buy products worn by celebrities seen in the videos (via mouseover or an option to click). I’m speculating, of course, but it does seem possible. So what will Rakuten buy next? My bet is on ViSenze or any other startups that can do object recognition on images or videos.

On a related note, Chinese e-commerce giant Alibaba has also recently made plenty of investments, including $586 million on microblog Sina Weibo and $294 million on online mapping company Autonavi. Rumor also has it that Alibaba is considering to acquire Chinese video site PPTV; the company has declined to comment on those reports.

(See also: 11 options for Japanese online shopping that aren’t Rakuten or Yahoo)

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