Linkshare and Rakuten Deal by the Numbers

linkshare Rakutan Logos

Rakuten’s recent $425M purchase of Linkshare has shocked the industry. Today I sat through Stephen Messer’s talk at EcomXpo about the merger and wanted to share some interesting notes, extrapolations and figures.

The Deal by the Numbers
Linkshare reports that they have approximately 500 clients, mostly fortune 500 companies. Messer reports that they had 1.4b in Gross Merchandise Sales in 2004, and that they track 11 million affiliate / merchant relationships.

Analysis and Extrapolations

  • $850,000 per Merchant Relationship
  • $38.62 pre affiliate / merchant relationship
  • ~ $8,500 per affiliate (assuming online guesstimates of 50,000 affiliates are accurate for Linkshare)
  • ~ 20x Annualized Revenues (assuming an average affiliate commission of 5% from 1.4B Gross Merchandise Sales, and a 30% revenue split for Linkshare means approximately 21M in annualized revenues)

    Interesting Facts about Rakuten
    Messer shared some interesting facts about Rakuten. Rakuten is the largest e-commerce player in Japan, and has one of the top 20 recognizable brands in Japan. In the Global Internet company arena, Rakuten is ranked number 7 with a market cap of 9.4B. Here is how the top 7 break down:

  • Google – $80.5B
  • eBay – $53.7B
  • Yahoo – $46.7B
  • Yahoo Japan – $35.5B
  • Amazon – $17.1B
  • IAC = $16.4B
  • Rakutan – $9.4B

    Rakuten built it’s portal business in Japan partly with the acquisitions of Infoseek and Lycos, and now is the number 2 portal in Japan, just behind Yahoo, with a reach of 41.6%, 971M page views and 1.6M unique users per month.

    Clearly Rakuten is one big major eCommerce player and a company we should all become more familiar with. A few more acquisitions and continued growth and they might just achieve their goal of becoming the number one Internet player in the world.

    About Adam Viener

    Adam Viener is the Chairman & Founder of imwave, inc, a leading performance search engine marketing agency. Imwave focuses primarily on building and launching effective pay-per-click search engine keyword marketing campaigns for companies paying commissions on sales and leads generated. In both 2009, 2010 & 2011 Imwave was recognized as one of the fastest growing privately held companies by Inc. Magazine. Imwave recently announced they had served over 5 Billion ads for their clients!

    Adam, a serial internet entrepreneur, founded one of the first commercial internet service providers (ISPs) in 1993. He has a deep understanding of internet technologies and profitable internet marketing tactics. Adam currently sits on the publisher advisory boards for Commission Junction and the Google Affiliate Network.

    Social Media:

    Twitter: adamviener
    • Anonymous

      "$850,000 per Merchant Relationship"
      I was confused by this point for a minute until I figured out it's a way of saying that of the total $425 million company value, each client in a way contributed $850k towards that valuation.

      Just wanted to clarify that for others. Thanks for the article. Good stuff.

    • http://twitter.com/Sarikay88629145 Sarikaya

      Watch out…Hiroshi Mikitani is planning to make Amazon “America’s Rakuten”.