Ariba Will Sell 40% Stake to Softbank
In Hopes of Easing Its Push Into Japan
By ROBERT A. GUTH
Staff Reporter of THE WALL STREET JOURNAL
TOKYO -- A gold rush by U.S. technology companies into Japan's growing Internet market is
gaining speed, as underscored by Ariba Inc.'s move to beef up its Tokyo unit by taking a $40 million
investment from Softbank Corp.
The deal is the latest by a growing number of U.S. Internet companies pushing into Japan. Despite
the recent carnage in Internet stocks in the U.S., demand for Internet-related equipment and software
is growing among large Japanese companies. Hoping to capture a wave of big orders, some of the
biggest Internet names are setting up shop in Japan, including AboveNet Communications Inc. and
Exodus Communications Inc., which operate Internet data centers.
Internet investor and holding company Softbank said it will take a 40% stake in Nihon Ariba KK, the
Tokyo unit of Ariba, of Mountain View, Calif. Ariba will hold 55% while the remaining 5% will be
reserved for the Nihon Ariba's employees and management, executives said.
"It's extremely important for the future of Ariba to be highly successful in Japan," said Ariba
President Larry Mueller.
The deal could quickly expand the scope of Ariba's operations in Japan, the second-largest market in
the world for its line of business, which is supplying software and services that enable companies to
buy and sell over the Internet with other companies. Its revenue swelled to $279 million in the year
ended Sept. 30, from $45 million a year earlier. Executives forecast the Nihon Ariba venture will post
revenue of 10 billion yen ($92 million) by about the end of 2001. The company plans to seek a
stock-market listing within 18 months, Mr. Mueller said.
"Japan is lagging behind the U.S. by a few years, so the business-to-business market in Japan will
grow very rapidly," said Softbank Chairman Masayoshi Son.
Citing statistics from Japan's Ministry of International Trade and Industry, Mr. Son said Japan's
business-to-business market for commercial transactions via the Internet should grow to 68 trillion yen
in 2003, from 19 trillion yen this year.
In an interview, Mr. Mueller said he and Mr. Son have begun talks on expanding their partnership into
China and South Korea. Mr. Mueller expects to have joint-venture deals in those countries by the first
quarter of 2001.
Executives said the companies plan to first introduce Ariba software and services among Softbank's
group of 450 Internet companies, which include Yahoo Japan and the Japan unit of E*Trade Group
Inc. The unit also plans to quickly build a base of customers among large Japanese companies that,
for instance, want to cut procurement costs by buying parts online.
Write to Robert A. Guth at rob.guth@wsj.com |
