Ebates has been sold to Tokyo-based Rakuten for one billion dollars in cash, according to a press release today.
This is a very interesting development, as Rakuten also owns LinkShare, which is an affiliate network.
Affiliate networks, like LinkShare and Commission Junction, act as intermediaries connecting merchants (like Barnes and Noble and Macy’s) with websites (like Ebates, MrRebates, or your favorite blog or website) for the purpose of advertising. If one of those website’s users clicks on the ad and makes a purchase, the website earns a sales commission.
Your favorite blogger would keep that commission. That’s how he monetizes his time in writing up awesome blog posts and sharing sales with you.
Your favorite cashback site would share a portion of their commission with the shopper in the form of cash back. (Of course they keep a portion for themselves.)
The purchase of Ebates by Rakuten is interesting, because now, that portion that Ebates would keep for themselves, is eliminated. They’ve cut out the middleman.
Ebates is the biggest US cashback site (at least according to the press release, citing $2.2B in member purchases made through Ebates in 2013). Theoretically, Ebates could offer higher cashback rates for Linkshare merchants now. And now Rakuten, as the owner of a “super-affiliate,” now has a very nice bargaining chip to try to woo away merchants who currently do business with Commission Junction, to c’mon over to LinkShare instead.
This also gives Ebates the moolah to further expand into other markets outside of the US.
Congrats to Kevin Johnson and the whole Ebates team!