LinkShare Acquired by Rakuten

Since it’s a final day of a three-day weekend I haven’t had time to process all the implications of this event or call anyone for rection or analysis. Actually, I’m still playing host to some out of town vistors.

Still, I wanted to make sure you had the news that Rakuten, a leading Japanese e-commerce portal it set to acquire LinkShare for $425 million.

This is the press release that arrived in my email at 7:26pm on Monday.

TOKYO and NEW YORK, September 6, 2005 – Rakuten, Inc. (JASDAQ: 4755) announced today that it has entered into a definitive agreement to acquire LinkShare Corporation, a privately held New York-based performance-based marketing firm, for a cash purchase price of approximately $425 million. The acquisition is expected to be completed within four to six weeks.

Founded in 1997, Rakuten is Japan?s most diversified Internet portal, with the number one sites in Japan for on-line shopping, travel, golf reservations, community and greeting cards. Rakuten?s on-line and Internet-related businesses also include shopping via Internet-enabled cell phones, auctions, financial services, broadband entertainment and business-to-business services. Rakuten, which has one of the most recognized Internet brands in Japan, is also the owner of Japanese professional baseball?s newest franchise, the Rakuten Eagles.

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

Established in 1996, LinkShare Corporation is a leader in performance-based marketing solutions, having created the largest network of affiliates of any program provider, with over 10 million e-commerce relationships. LinkShare has over 500 clients including J.C. Penney, 1-800-Flowers.com, American Express, Avon Products and Dell. LinkShare has been named the New York area?s fastest growing technology company for two years in a row on the Deloitte & Touche Fast 50 list.

?By partnering with a successful portal with global aspirations, LinkShare has positioned itself to take advantage of the increasingly universal nature of the Internet and e-commerce,? said Stephen D. Messer, Chairman and CEO of LinkShare Corporation. ?Our merchants and our affiliates will benefit because taking the network worldwide can only increase volume, which means growth for everyone.?

LinkShare?s senior management team, including Mr. Messer and LinkShare?s President and COO, Heidi Messer, will remain with the company. They will lead the continued growth of LinkShare’s core businesses and will closely support Rakuten?s U.S expansion and exploration of potential acquisitions.

Morgan Stanley represented Rakuten, Inc., and Goldman Sachs advised LinkShare in the transaction.

About Rakuten, Inc.
Rakuten, Inc., is a leading Internet portal in Japan, bringing a wide range of services to consumers through its main division companies in E-Commerce (EC), Portal and Media, Travel, Financial Services, and Professional Sports.

The EC company provides a general on-line market for consumers, on-line auctions, and a place for B2B trade in used goods. The Portal and Media company offers Internet search and marketing services, job search, and satellite TV channels. On-line hotel and international air reservations can be done through the Travel company, and the Financial Services company houses Rakuten Securities, one of Japan?s strongest on-line brokerage services, and also provides personal financial services. Lastly, Rakuten is the proud owner of a professional baseball team — the Rakuten Golden Eagles.

Rakuten is a public company listed on the JASDAQ with a market capitalization as of September 5, 2005 of $9.7 billion.

About LinkShare Corporation
LinkShare Corporation is a leading provider of technology solutions to track, manage, and analyze the performance of sales, marketing, and business development initiatives. Combining patented technology, the reach and distribution of a robust network, and expert account management services, LinkShare empowers clients with the ability to collaborate with partners online and develop cost-efficient pay-for-performance campaigns. In 2004, approximately 2% of U.S. retail e-commerce, or $1.4 billion, passed through the LinkShare network. LinkShare provides the platform, tools, and reporting to help clients acquire new customers, increase revenues, drive results, and measure success across affiliate, search, and e-mail initiatives. LinkShare clients are Fortune 500 and prominent companies doing business online, and include J.C. Penney, 1-800-Flowers.com, American Express, Avon Products and Dell. LinkShare was founded in 1996 and is headquartered in New York City, with offices in San Francisco, Denver, and Chicago.

LinkShare’s investors include Mitsui & Co., Ltd. (NASDAQ: MITSY), Mitsui & Co. (U.S.A), Inc., Internet Capital Group (NASDAQ: ICGE), and Comcast Interactive Capital, an affiliate of Comcast Corporation (NASDAQ: CMCSK; CMCSA). Please visit http://www.linkshare.com for more information.

Let me know how this deal might impact your business or online marketing. [email protected]

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