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To: italiana who wrote (7330)	6/25/1999 8:42:00 AM
From: Spytrdr	Respond to of 13953

June 25, 1999 Japan's Softbank Unveils A Package of New Deals By NORIHIKO SHIROUZU and JATHON SAPSFORD Staff Reporters of THE WALL STREET JOURNAL TOKYO -- Softbank Corp. announced a series of deals that will advance its strategy of investing in U.S. Internet start-ups or mimicking their services and then introducing new versions of these Web-based businesses to Japan. Softbank, Japan's leading Internet company, said it is forming three new venture-capital funds -- two in the U.S. and one in Japan -- through which it plans to raise more than $1.7 billion for investment in start-ups. The new funds will boost Softbank's profile in the U.S. venture-capital market, and make it one of the biggest venture companies in Japan. Japan's Softbank Is Shaking Up a Once-Sheltered Financial System (June 21) Also unveiled was a new venture between the company's Softbank Finance unit, a provider of Internet-based financial services, and DirectAdvice.com of the U.S. to offer online investment advice in Japan. The venture is to be capitalized at about $2.5 million. Softbank Finance will have a 67% stake in the joint venture and DirectAdvice will have 22%, with the remaining 11% going to outside investors. Toy Sales Softbank also announced a separate venture with Yahoo Japan Corp. -- itself a venture between Softbank and Yahoo! Inc. of the U.S. -- to sell toys over the Internet. E-shopping! Toys Corp. will be capitalized at $1.65 million and will be established in July, Softbank said. Softbank will have a 52.5% stake in the new venture. Other shareholders include Japanese toy companies Bandai Corp. and Tomy Co. These investments, though many of them are small, show how Softbank founder and Chief Executive Officer Masayoshi Son is securing his place as Japan's leading venture capitalist by borrowing deeply from the experience of rivals in the U.S. market. For instance, Mr. Son said he got the idea for the toy business from eToys Inc. of the U.S., which offers about 15,000 toys through its Web site. With Japan's top toy makers and major wholesaler Happinet Corp. on board, "we can more than double eToys' product lineup," he said Thursday. Mr. Son has managed to charm many with his aggressive strategy. On the Tokyo Stock Exchange Thursday, Softbank shares soared 9.1% to a record 23,970 yen ($197) on news of the deals. And many say the best is yet to come. Softbank shares have performed twice as well as the 14% rise in the Japanese stock market so far this year, but Lehman Brothers & Co. said in a recent report that Softbank shares are likely to climb a further 74% before they peak. The expansion makes other observers nervous, however. "Internet commerce has good growth potential in Japan," said Mitsuko Morita, analyst at Morgan Stanley Dean Witter & Co. But Softbank's investment strategy strikes her as too scattershot, she added. "They will hit the jackpot in some cases, but they are likely to come out totally empty-handed with others." Softbank clearly has done well with its Yahoo Japan venture, which said Thursday that registered users in Japan have topped the one-million mark. Yahoo Japan posted pretax profit of 187 million yen in the most recent quarter, up 68% from the previous three-month period. Softbank and Yahoo have tied up with similar ventures in markets ranging from South Korea to Germany to France. Slew of Holdings Meanwhile, the list of U.S. companies in which Softbank holds stakes reads like a who's who of hot new American Internet companies: E*Trade Group Inc., InsWeb Corp., Sonnet Financial Corp. and E-Loan Inc. It also holds shares in more than 100 nonlisted Internet companies, according to Lehman Brothers. Last week, Softbank announced it would tie up with the Nasdaq Stock Market to set up in Japan a market similar to the one operated by Japan's leading securities-industry group. Many jokingly refer to Softbank as the "Internet zaibatsu," after the huge Japanese conglomerates that helped fuel the nation's war effort earlier this century. Mr. Son sees his various businesses helping each other grow, much like the companies of the old zaibatsu fed business to each other. The new E-Advisor Web site it is setting up with DirectAdvice.com, for instance, will also provide links to other financial-related sites of the Softbank group. Softbank, though, is building its conglomerate so quickly that many observers won't venture a judgment on how well it is doing. "New deals [involving Softbank] come out just about every day," said Ms. Morita of Morgan Stanley. "How can you evaluate all these deals?"