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Rakuten Inc buying Linkshare for $425 million

Japanese Internet Portal expanding into US market

     
1:40 am on Sep 6, 2005 (gmt 0)

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Full story here [marketwatch.com]
2:24 am on Sept 6, 2005 (gmt 0)

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Interesting. Sold for 425M. If LS handles 1.4 Billion in transactions and they typically take 3% of sales, that puts them at about 42M a year in sales.

So that's around 10X sales and probably somewhere between 20X & 40X earnings. They've probably got pretty fat margins.

9:58 am on Sept 6, 2005 (gmt 0)

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Very interesting thanks for posting this. I thought they would go for more but it does say its a cash deal - I guess the powers that be at LS won't be complaining :-)

Mal

1:42 am on Sept 7, 2005 (gmt 0)

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That's a very good find bnhall. I really don't see that in a lot of the Japanese media.

LinkShare has been active in Japan for years now. Recently it appears to be quite active. Rakuten started out as an online shopping mall. I remember when they had less than 100 advertisers. ;) They have grown into a huge profitable portal. They just bought a professional baseball team recently and seemingly have the cash to throw around.

3:15 am on Sept 7, 2005 (gmt 0)

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considering for how long Linkshare has been around, this isn't a good price--at least not by VC standards. Personally, I'm no big fan of Linkshare; their system (how to create links etc.) hasn't changed for years. Other than a few extra reports, the interface and options are still the same, despite many suggestions by me and other people.

CJ is king as far as I'm concerned. Always changing, always making it easier.

4:12 am on Sept 7, 2005 (gmt 0)

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I always expected a Billion $ IPO . . .

I remember then when they started up in NYC

the good old days of the late 90's

4:15 am on Sept 7, 2005 (gmt 0)

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WOW! Interesting news. I thought Linkshare was owned by American Express for some reason I guess I was wrong. I bet there will be more and more buyouts of American Internet companies as Japan and China spend some of their cash.

I would be interested to see what they plan to do with linkshare. Probably add lots of Japanese businesses to it..

4:30 am on Sept 7, 2005 (gmt 0)

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Probably add lots of Japanese businesses to it..

LinkShare Japan [linkshare.ne.jp] has been around quite a few years now. I doubt you'll see many more than you do now.

Rakuten is looking to get some business going in the US. I doubt they'll go in and gut the place, and I wouldn't expect much change on the user side.

5:07 am on Sept 7, 2005 (gmt 0)

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It would be nice to see them invest in an overhaul of the interface of the LinkShare system. They've got the merchants and some pretty detailed reports now if they could just create a better interface, they could probably get affiliates to crank a lot more business through the system.
7:00 am on Sept 7, 2005 (gmt 0)

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CJ is king as far as I'm concerned. Always changing, always making it easier.<<<<<

What is CJ?

1:44 pm on Sept 7, 2005 (gmt 0)

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Commission Junction
8:05 pm on Sept 7, 2005 (gmt 0)

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Yeah, maybe they'll be able to clean things up over there. Not holding my breath though.
8:44 pm on Sept 7, 2005 (gmt 0)

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What's weird about this is that it has that deja vu feeling from when the Japanese were making high visibility purchases like Pebble Beach and Van Gogh paintings, to low visability purchases like buildings and companies.

Is Japan going through a dot com thing, too? Should we expect more purchases by the Japanese?

10:24 pm on Sept 8, 2005 (gmt 0)

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How do you say, "That is waaaayyyy overpriced." in Japanese?
12:17 am on Sept 9, 2005 (gmt 0)

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Classic Japanese mistake - spending too much for an asset. They did it with real estate in the 1980s in the US. Linkshare is worth maybe 100M - maybe. They have had a lot of merchant defections of late (Walmart, Cooking.com)
1:30 am on Sept 9, 2005 (gmt 0)

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the probbaly paid mostly with stock anyway. Used overpriced stock price to overpay for Linkshare. It balances out :)
4:21 pm on Sept 11, 2005 (gmt 0)

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Japanese on buying spree--again.

[msnbc.msn.com...]
Japan's Access to buy PalmSource

"The news had some analysts wondering how PalmSource, which has failed to excite investors since Palm Inc. spun it off two years ago, could draw such an offer.

“This was really dumb,” said Needham & Company stock analyst Charles Wolf. “They are paying that kind of money for a company with no real profits and one product. I’m stunned.”"