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Takeaway: It's all fun and games and pink fluffy unicorns until the music stops.

In the latest sign of our hyper-valued, bubbly marketplace, we give you EBates...

Off the Radar: Yet Another Example of the Hyper-Inflated Market Bubble - fr3

Rakuten to Buy Ebates in Japan’s Biggest E-Commerce Deal

  • "Rakuten Inc. agreed to buy U.S. rebates website Ebates Inc. in Japan’s largest e-commerce deal as the operator of the country’s biggest online mall seeks overseas growth through acquisitions."
  • "Rakuten will pay $1 billion in cash for all of Ebates, it said in a filing to the Tokyo Stock Exchange today. San Francisco-based Ebates offers cash rebates to customers who buy products ranging from laptops to lipsticks from the website’s retail partners."
  • "Rakuten’s billionaire chairman Hiroshi Mikitani is betting the purchase will help the Tokyo-based company push its global e-commerce strategy. Rakuten has also been plowing cash into technologies such as mobile applications and online video as it seeks to add to its online marketplace business."

Takeaway

There are no direct public company implications here. But the simple fact that a Japanese company is buying an early cycle, non-asset-based US e-tail startup for $1bn in cash is pretty much huge any way we slice it.

In order of magnitude, this is like when Amazon bought Zappos for $928mm six years ago -- near the top of the last cycle.  Except for the fact that Zappos actually had a brand... And a loyal customer base... And warehouses... And suppliers... And revenue...