Softbank Plans To Invest In 20
More Firms This Year
ATLANTA, GEORGIA, U.S.A., 1996 SEP 19 NB) --
By Russell Shaw. Softbank Corp. [TOKYO:9984]
CEO Masayoshi Son, whose rapid pace of corporate
acquisitions has begun to raise concern in some parts of
the financial community, said that his company will own
stakes in 50 "Internet-related" companies by the end of
this year. The company already has full or partial
ownership in 30 such firms, meaning there will be about
20 new investments before 1996 ends.
During the Networld+Interop show, which Softbank
owns, Son told Newsbytes that although he was
reluctant to name any of these companies, the new
investments would "be in companies that provide the
infrastructure for the digital information industry."
To date, Tokyo-based Softbank's two largest purchases
have been a 94 percent stake in computer magazine
publisher Ziff-Davis Publishing, and a $1.5 billion
purchase of memory- module maker Kingston
Technology Corp., earlier this year. Within the last
several months, Softbank also has acquired significant
stakes in Internet search firm Yahoo and electronic
commerce company CyberCash. But it is the amount
Softbank is paying for Kingston as well as a perceived
lack of synergy with Softbank's other businesses which
have provoked questions about whether Softbank itself,
which Son acquired in 1995, is starting to bite off more
than it can chew.
"People have said that Kingston is 'some hardware
company' that's away from the business lines we've been
(investing in)," Son admitted. "In our definition of the
(information) infrastructure and how Kingston fits, (it's
true that) they provide memory cards as their main
products, but they do not see themselves as a products
company -- but as a service company."
Son said since he envisions Kingston's memory upgrade
products as a facilitator for the upgrading of personal
computers that will handle powerful, speed-hungry
Internet-related applications. So the fit with Softbank's
other Internet businesses is a natural one.
"There are so many computer systems vendors like
Toshiba and Samsung, but in between there is a need for
a memory upgrading service," he said. "Kingston
provides 2300 different versions of memory cards,
designing all different kinds of them. They provide
procurement of those memory products in a very timely
manner. That we consider as the technology side of the
information infrastructure business."
Son said that income from the Kingston acquisition
would result in projected income from gross sales
around $6 billion in 1997, compared to $3 billion this
year and $1.7 billion in 1995.
While he declined to cite specifics, Son did hint,
however, that the product lines of the 20 companies in
which Softbank will invest by the end of 1996 may come
closer to the popular perception of business synergy than
acquiring Kingston was. Son was also careful to point
out that these companies would not be bought just to
reach the stated goal of 50 Softbank companies but
because they are market leaders.
"We are doing many, many other investments in the
Internet area, and are looking for number one companies
in the Internet market," he said. "The Internet has broad
services, products and technologies, and in each one of
those areas we are investing in number one companies."
(19960919)
Copyright 1996 by ClariNet |
