<<'Net Summit '99
Softbank founder sees Internet leaps
By Thom Calandra and Bambi Francisco,
CBS MarketWatch
Last Update: 7:37 PM ET Jul 19, 1999 Net Stocks
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LAGUNA NIGUEL, Calif. (CBS.MW) -- Softbank President and CEO Masayoshi Son, one of the rare Japanese Internet billionaires, said an alliance with media mogul Rupert Murdoch will propel the holding company's growth outside of Japan and North America.
Son said ventures with Murdoch's News Corp. (NWS: news, msgs) will help Softbank locate Internet properties in India, Australia and Britain. Son, speaking at an Internet conference, also said he expects the value of his group's holdings will grow faster than those of legendary U.S. investor Warren Buffett of Berkshire Hathaway (BRK: news, msgs).
"Looking at the rate of speed of drinking Coca-Cola and Internet speed, I bet on Internet speed," said Son, whose Softbank is now half the size of Berkshire Hathaway. Buffet owns stakes in companies such as Coca-Cola Co. (KO: news, msgs) and See's Candy and has been quoted to the effect that he prefers to back old-style insurance, consumer goods and manufacturing companies instead of Web companies.
Son's Softbank took early-stage stakes in companies such as Yahoo (YHOO: news, msgs), E-Trade (EGRP: news, msgs), E-Loan (EELN: news, msgs), Ziff-Davis (ZD: news, msgs) and Geocities (GCTY: news, msgs). Some of the thriving Japanese units of U.S. companies now trade separately on the Tokyo Stock Exchange, as does Softbank.
"When we watched Softbank's moves in the early 90s, we wondered how they would put it all together," said Morgan Stanley Dean Witter (MWD: news, msgs) Internet analyst Mary Meeker, an organizer of the Internet Summit '99 gathering in Southern California this week. See more on the conference.
Son on Monday told an audience of 500 or so Internet executives that he expected the growth of Internet companies, and their stock market valuations in the United States and Japan, to keep rising. "Many people believe there is an Internet bubble, but it is only 10 percent of the PC market cap," he said about the stock market value of personal computer makers.
Son lamented that he and his company, which is Japan's largest software distributor and publisher of computer magazines, had not taken early stakes in America Online (AOL: news, msgs), Amazon.com (AMZN: news, msgs) and eBay.com (EBAY: news, msgs). He said he intends to pursue several large acquisitions of equity in South American Web companies.
Son also sought to distinguish his holding company's style from that of CMGI (CMGI: news, msgs), a large U.S. Internet holding company. "Our sweet spot is between 20 percent and 35 percent ownership," he said about Softbank's 120 or so holdings. In contrast, CMGI sometimes takes larger stakes.
CMGI CEO David Wetherell said earlier that CMGI owns stakes in 40 Web-oriented companies and that he is busy "creating a mega portal for the consumer." Son, in contrast, said he rarely if ever tries to exercise direct control over his portfolio of companies.
"We have a very international group of companies and we would like to grow even faster," said Son, who predicted that returns for Internet investors will run as high as 1,000 percent in the next several years.>>
Thom Calandra is editor-in-chief of CBS MarketWatch. |
