The Yahoo Japan joint venture with America’s Yahoo (1996)

A share plucked from an information network that set the company’s value

The heart of this decision lies less in launching a search portal in Japan than in concentrating capital on a small, unproven venture on the strength of nothing but a conviction drawn from an information network. Neither the ¥200 million of 1995 nor the ¥10 billion of 1996 could be justified by working back from the scale of the business at the time. SoftBank could commit those sums because, at the far end of the information network built through the Ziff-Davis acquisition, it could make out the shape of the technology coming next. The logic of betting not on an acquisition target’s earnings but on the information gleaned from it here bore its first fruit.

Just as weighty is that this single episode set the group’s corporate value itself. During the internet bubble, SoftBank’s market capitalization rested not on its own operations but on the unrealized gains tied to Yahoo, and that valuation swayed as the share price turned. That a stake picked up for ¥200 million turned into unrealized gains of trillions of yen shows Son Masayoshi’s nose as an investor, and at the same time carried the danger of entrusting corporate value to another company’s share price. The bet on an unknown company found at the far end of an information network, one can say, shaped what SoftBank would look like for a long time after.