BUSINESS

Kobo investor Rakuten invests US$100 million in social media site Pinterest

05/17/2012 03:05 EDT | Updated 07/17/2012 05:12 EDT
TORONTO - The Japanese e-commerce firm that bought e-reader company Kobo Inc. is now picking up a major stake in social media site Pinterest.

Rakuten Inc., based in Tokyo, will invest US$100 million into the website, which launched in 2010, but has experienced a surge in popularity this year.

Pinterest allows users share photos and links with their friends on a pinboard-style webpage layout. The site also provides a marketplace for its users to sell products.

Rakuten says the investment will allow it to access synergies between Pinterest and its own e-commerce model, which includes websites Buy.com and Play.com.

"While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining," chief executive Hiroshi Mikitani.

The company also hopes to expand Pinterest into Japan and its 17 other global markets.

Rakuten acquired all of Toronto-based Kobo for US$315 million in January, including the 51 per cent stake owned by Indigo Books & Music Inc. (TSX:IDG).

"Rakuten's investment in Pinterest signifies the beginning of a perfect storm in the social reading space in which Kobo has become synonymous," said Kobo chief executive Michael Serbinis in an emailed statement.

"The vision to commercialize Pinterest's pinboards by leveraging Rakuten's e-commerce expertise can only help to further entrench reading, e-books and Kobo in social media."