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Originally Posted by eschwartz
Selling more Kobos makes them more money in the long run than selling library Kindlebooks. 
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That... might not be quite true.
Overdrive library pricing is quite high. Enough to draw in some deeper pocket competitors like 3M. And they *are* profitable, which Kobo hasn't been. (Possibly becsuse of their local retailer reliance/cost sharing, possibly because of their less-than-successful tablet venture.)
I think it is significant that they're paying more for Overdrive than they paid for Kobo, even back when ebook adoption was booming and Kobo still had hopes for big growth in the US/UK markets.
Also, there is more to Overdrive than library ebooks; they're a back-end ebook services provider like Bluefire and they have long been active in educational ebook efforts which is how they landed in the library business.
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OverDrive, Inc. is an American digital distributor of eBooks, audiobooks, music, and video titles. The company provides secure management, digital rights management and download fulfillment services for publishers, libraries, schools, and retailers.[1] OverDrive's catalog includes more than 2 million digital titles from more than 5,000 publishers.[1] The company's global network includes more than 27,000 libraries and schools.[1] OverDrive was founded in 1986 and is located in Cleveland, Ohio.[1]
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http://en.m.wikipedia.org/wiki/OverDrive,_Inc.
Rakuten's bread and butter is B2B retail *services* rather than consumer sales--that makes Overdrive a much better fit for them than Kobo, which is mostly a consumer play. This is reflected in the lack of Kobo integration in their portal websites.
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OverDrive's download services include several software as a service products for libraries, retailers, schools, publishers and the military. Overdrive Marketplace, formerly known as Content Reserve, serves as a collection development portal.[21] Publishers upload their content to this marketplace and apply DRM settings for protected content. Libraries can then log in to Overdrive Marketplace and add content to their virtual branch website. Retailers can also use Overdrive Marketplace to supply their online stores. OverDrive's other web-based products for content protection and management include: Private Reserve, a private, online repository for rights-holders to upload, organize, protect and distribute their eBooks, documents and other digital material; MIDAS, a white-label e-retail solution that allows retailers to sell OverDrive-distributed media; and Adobe ADEPT, a hosted service for protecting files viewed with Adobe Digital Editions
OverDrive-distributed eBooks, audiobooks, music and video play in a proprietary media player called OverDrive Media Console, which is available for Windows and Mac platforms, as well as Android, Blackberry, iOS (iPhone, iPad, iPod Touch), and Windows Phone 7; on some devices, eBooks can also be downloaded and played in Adobe Digital Editions software. OverDrive also supports Kindle-format eBooks.
Libraries providing digital media titles to their users can be found through the Overdrive Search portal.
With its Next Generation enhancements, OverDrive offers OverDrive Read, a browser-based eReading experience; streaming audiobooks, which enable on-demand access to audiobooks via the OverDrive Media Console apps; OverDrive Media Station, a platform that lets patrons browse their library's digital collection on touchscreen monitors and public Internet workstations; Next Generation Content Reserve, a streamlined collection-development portal; and OverDrive APIs, which allow developers to integrate OverDrive content into apps and platforms.[5]
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Kobo under Rakuten has shown limited growth and profitability, reflected in last year's appointment of a Rakuten internal turnaround specialist as Kobo CEO. Rakuten buying Overdrive *should* help Kobo but that would be mostly becsuse Kobo *needs* the help. Too much of Kobo's business model is about "we're not Amazon" which is of no use in competing with Apple, Google, Tolino, and other regional players.
Overdrive has a business that can both leverage Amazon's market as well as the other global players and as well as compete with them. They're no crusaders, they'll just go where the money is.
Edit: There are two things ebook related that Kobo does that Overdrive doesn't and that is hardware and Indie publishing. Although Overdrive has been reaching out to indies recently, through their Smashwords deal.
There is some potential for sibling rivalry in this deal. It'll be interesting to see how things play out.