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Softbank said Monday it plans to cut its majority stake in Yahoo Japan to 42 percent by selling shares in the Web portal to fund its fledgling broadband service.
This is interesting because up until now Softbank has held to a controlling majority status of just slightly above 50%. The next biggest shareholder is Yahoo! Inc., who held 33.50% as of January 2003. Although Softbank is still the largest single shareholder in Yahoo Japan, going below that 50% threshold indicates a shift in the controlling interest in the company.
At the moment as long as Softbank are still the major stake holder there should not be too many changes.
It is interesting to note that Yahoo Japan have not changed the position of their Yahoo listings from the front of the search results to mixing them in as they have done in Yahoo USA.
New York Times [nytimes.com]
"Softbank is selling everything it can get its hands on," said Ben Wedmore, an analyst at HSBC Securities in Tokyo. "It needs cash and doesn't want to go to the bank."
But it has long resisted reducing its stake in Yahoo Japan to maintain management control. After the sale, Softbank will control 42 percent of Yahoo Japan, the country's most profitable Internet company, down from just over 50 percent.
This is interesting because up until now Softbank has held to a controlling majority status of just slightly above 50%. The next biggest shareholder is Yahoo! Inc., who held 33.50% as of January 2003. Although Softbank is still the largest single shareholder in Yahoo Japan, going below that 50% threshold indicates a shift in the controlling interest in the company.
Well if you quickly do the math, they originally had 50.25% of the shares which means 8.25% are available to purchase. (50.25-42) This means, even if Yahoo were to purchase those 8.25%, Softbank would still be the leading shareholder as Yahoo have 33.5% so their maximum potential value is 41.75%. So in theory it's quite a shrewd move by softbank imho.
However, it is interesting that they have gone below that 50% threshold that they normally do stay above. Will be an interesting one to follow.
Nice post.
Sticky
[added: got my math correct this (third) time]
[edited by: stickledene at 8:14 am (utc) on Mar. 5, 2003]
Why would you sell down your share in a highly profitable company to take chance on may be making some money in the highly competitive market of broadband.YahooBB was pretty ground breaking when it was first introduced. They were offering broadband at blistering speeds at a fraction of what other ISPs were. The Yahoo brand ADSL was in a position to define the market. Now they're taking on the phone company <pseudo-monopoly> by offering IP phone calls. Again they are undercutting the competition and defining a market.
This is a bit more than 'becoming an ISP'. They are carving out market share and moving ahead into new areas (at least for Japan).
That in turn is whipping NTT (semi-national telephone company) and competitors into a frenzy pushing competing ASDL services. There's even a company that's planning to unveil 100Mbps fiber connections *for consumers* - so far, they've limited the service to business customers.
Personally, I've got $40 a month unlimited service from a local TV cable provider who also does internet service in parts of Tokyo. 8Mbps, and no slowdowns *ever* that I can see. For an extra $10-ish a month I could upgrade to 30Mbps...
There's even a company that's planning to unveil 100Mbps fiber connections *for consumers* - so far, they've limited the service to business customers.
For the webmaster our problems is work out how much content and when we provide for the BB visitor.
Still from a business point of view, I still don't understand why softbank is so keen to get into this market. The return on their capital will take years to come back, if at all.
The only advantage I can see for them is to grow the internet market in Japan overall. Go into the BB market, push the price down, generate demand, but then really make the money from other services. May be this would work given Yahoo! Japan's massive market share.
Just as a passing note. I have been doing some comparison between the traffic coming from Yahoo Japan (Google data & others excluding Yahoo listings) and Google Japan. In the last six months Yahoo Japan seems to held its ground. I am sure this is not the case for Yahoo USA or Australia portals in the English language market.
Yahoo BB: 2,181,000 (+210,000)
NTT West: 1,071,396
NTT East: 1,334,585
Total (including other companies): 6,589,867 (+469,984)
I read an article somewhere the other day that claimed 50% of Japan's population had access to the Internet. I'm not sure how they broke this down between phones and computers, but that would mean there are an estimated 63.5 million Japanese people online now.
