Books written by Ray Sullivan

Thursday, 10 November 2011

Kobo sold to Rakuten - WH Smith Next?

Rakuten is one of the largest e-commerce companies in the world and extremely big in Japan.  They've been on a major spending spree this year, purchasing US e-store (which has a UK presence) and in September, (for £25M).  Play are one of those go-to web traders that have built up a massive following in the UK mainly due to their keen pricing and superlative service (I know there will be some who will have experienced issues, any organisation that does as much trade will have upset someone on the way, however my personal experience over many years of trading with them has always been positive).

Now they've bought Canadian firm Kobo lock, stock and barrel for an eye watering $315M.  And crucially they've left the organisation in the hands of the current management team in Canada.  That is the action of a bull, not bear, market.

Pundits are suggesting that they are going to focus on pulling the Japanese market together, which is both cautious and fragmented in ebooks, which may be correct.  However I can't believe an organisation would spend that much on a company that is already expanding across multiple regions including the UK and not try to leverage the synergies presented.

For example, Play doesn't have a huge amount of e-reader merchandise for sale and doesn't appear to be in the ebook market at all.  However, ebooks would appear to be a natural avenue for Play, as many of its product lines shadow Amazon (some in the UK might suggest it was the other way around).

So I wouldn't be surprised if Play didn't start pushing both Kobo and the Kobo bookstore on its website.  However my understanding is that WH Smith have sole UK distribution for the device and Kobo are allegedly porting a brand new front end to WH Smith for its ebooks.  Naturally I'm not privy to the deal between Kobo and WH Smith so the deal may not be as exclusive as reported, in which case expect the devices to be marketed aggressively on Play sometime soon.  If, however, the deal is exclusive then there may be some interesting months ahead.  Perhaps Rakuten will consider acquiring WH Smith while they're out shopping?

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Now on WH Smith!

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