LinkShare to be Acquired by Japanese Portal

Japanese Internet portal Rakuten has agreed to acquire affiliate marketing firm LinkShare for $425 million in cash.

In Japan, Rakuten runs top-ranked sites for online shopping, travel, golf reservations, community and greeting cards. The acquisition, Rakuten’s largest yet, is expected to close next month. This is the Tokyo-based company’s first expansion in the United States, though the company hinted that it expects to make more.

“LinkShare’s performance-based marketing expertise across affiliate, search, and email capabilities provides Rakuten with an excellent first step to launch our U.S. operations and continue our international expansion,” Hiroshi Mikitani, Rakuten’s chairman and CEO, said in a statement. “We can leverage LinkShare’s client relationships and technology advantages worldwide, so that LinkShare will be able to achieve significant growth in the future.”

LinkShare has more than 500 clients including J.C. Penney, 1-800-Flowers.com, American Express, Avon Products and Dell. LinkShare will operate as a wholly owned subsidiary of Rakuten, and its senior management team will remain with the company.

Stephen Messer, LinkShare’s chairman and CEO, and Heidi Messer, president and COO, were also LinkShare’s largest shareholders, with a 40-percent stake. Venture capital firm ICG held a 35-percent stake, with Mitsui & Co. and Comcast holding the remaining shares.

Stephen Messer, chairman and CEO of LinkShare, said merchants and affilates would benefit from increased volume when Rakuten takes the network worldwide.