DoCoMo, Rakuten to Form Strategic Alliance in Internet Auction Services

Japan’s top mobile carrier DoCoMo and leading online mall operator Rakuten have forged a capital alliance to expand mobile auction services. Rakuten will spin off its peer-2-peer (P2P) auction network, Rakuten Flea Market, into a separate entity, Rakuten Auction, Inc from Dec. 1st. DoCoMo will then invest 4.2 billion yen ($37 million) starting Dec. 16 for a 40 percent share of the new firm. The deal does not include Rakuten’s profitable B2C (Business-2-Consumer) Super Auction site, which offers new goods from its huge listing of online mall operators. Rakuten currently has around 17.3 million users; DoCoMo 45 million subscribers.

Anxious to break the news to the media, the planned tie-up was announced at a hastily called press conference in Tokyo’s Okura Hotel with virtually no details on how the two firms plan on tweaking the service to attract DoCoMo users or differentiate it from KDDI’s EZ Web auAuction or even Rakuten’s current somewhat limited mobile auction portal. DoCoMo President Masao Nakamura and Rakuten President Hiroshi Mikitani were ill prepared to answer questions from the media pressing for more details.