This article was published on January 26, 2012

Yahoo is in talks to withdraw from its joint venture in Japan


Yahoo is in talks to withdraw from its joint venture in Japan

Yahoo Japan has confirmed that it is in discussions with Yahoo Inc over the withdrawal of the parent company’s stake in the joint operations in the country, which are run in partnership with mobile operator Softbank.

The move will not be an end to Yahoo Japan, but it will close its association with the worldwide group and leave the door open for a new partner to step in to take its 35 percent share in the venture.

Yahoo Japan is one of the group’s most successful subsidiaries, however the arrival of a new CEO — former eBay head Scott Thompson — sees the group looking to move in a new direction, without its Japanese presence.

Akira Kajikawa, Yahoo Japan’s Chief Financial Officer, confirmed that talks are ongoing:

Yahoo Inc. is still trying to finalize the mechanism (for offloading its stake) and we are cooperating with them.

Kajikawa calls the process “hugely complicated” and, with Softbank reported to have no interest in buying out Yahoo, Dow Jones claims that Yahoo Japan may acquire the stake itself or sell it on to a new partner. Both sides are working to conclude a deal to avoid significant taxes.

Rumours of a possible exit in Japan have been on the cards for some time. In October last year, with Yahoo then rumoured to be the subject of takeover interest, the removal of shares in Yahoo Japan and Chinese commerce firm Alibaba was seen as key to simplifying a possible deal.

Yahoo Japan is rated at $6 billion and it has a strong brand and a number of popular services. Earlier this week, we revealed that its virtual storage service had signed up one million users in three months, in spite of strong competition. Its Yahoo Japan website is the country’s most visited site (according to Alexa) while its most recent public data (PDF) indicates that mobile accounts for an impressive 20% of its monthly page views.

The group is in good company as a Western tech firm abandoning its efforts in Japan. Myspace recently took a similar step when, last November, it announced its intention to walk away from its joint venture in Japan from 1 February 2012.

[Image via Flickr user marcveraart]

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