didn't see this article posted here:
washingtonpost.com
(...)No one has benefited more from this changing
environment then Japan's best-known rabble-rouser –
Masayoshi Son, a 48-year-old entrepreneur who has
long flouted the rules of Japanese business and who for
years suffered for it. The ambitious, restless soul of
Korean descent often incurred the fury and at times
outright opposition of the Japanese government and
business establishment.
But now his company, Softbank Corp. – which was
created in 1981 as a software distributor and became an
early, aggressive investor in U.S. Internet companies –
is flourishing. And Son is one of Japan's wealthiest
businessmen.
Softbank's $2 billion stake in 100 Internet companies
has grown in value to more than $17 billion. Its holdings
include chunks of Yahoo Inc., Buy.com Inc., CyberCash
Inc., E-Loan Inc., E-Trade Securities Inc. and
GeoCities. And Softbank has established a number of
joint ventures in Japan, including Yahoo Japan,
GeoCities Japan and E-Trade Japan.
Softbank's Son moved to the United States at age 16,
fleeing to San Francisco to live with family friends and
escape the racism directed against Koreans in Japan.
His family had been forced to adopt a Japanese name to
become citizens here. But in California, Son began using
his Korean name.
Son attended high school and then the University of
California at Berkeley. He got hooked on computers and
made more than $1 million by selling an electronic
translator he invented to Sharp Corp. and by importing
video games. He returned to Japan to start Softbank.
Corporate Japan was always uncomfortable with Son.
They disapproved of his habit of rewarding star
performers. They found his relentless dealmaking
unseemly.
But it was his decision to ignore the advice of his bank
four years ago that turned the Japanese business
establishment against him. Japan's business world was
built on the "main bank" system. The government gave
marching orders to the major banks. The banks in turn
supervised their corporate customers, who were
expected to acquiesce.
Softbank's "main bank" was the influential Industrial
Bank of Japan. IBJ became furious in early 1995 when
Softbank purchased Comdex, the world's largest
computer trade show, and demanded that Softbank seek
bank approval for any future acquisitions.
Son refused, certain it would be disastrous to give
slow-moving, conservative bankers in Tokyo veto
power over investments in America's booming high-tech
industry.
"I told them we could tell them we were negotiating
with some company. But to get permission from a
Japanese bank, that would take forever," Son said. "It
was a hard decision, because I knew how Japan – the
business community, journalists, analysts and rating
agencies – would react."
IBJ responded by withdrawing Softbank's credit line.
Son asked Nomura Securities Co. to issue bonds to raise
money. But Nomura hesitated after the Finance Ministry
pressured Nomura to halt the deal unless IBJ was
involved.
Then Son got a call from a Finance Ministry official
who wanted assurances that Son would not sue the
government for abuse of power. Son replied: "If that's
what it takes, I won't hesitate." That same day, the
Finance Ministry said Nomura could issue the bonds,
Son said.
IBJ retaliated by dumping all the Softbank stock it held.
The story was leaked to the press, becoming front-page
news, and triggering panicked investors to sell their
shares of Softbank. Son was criticized by leading
Japanese executives. "They said, 'How can Softbank
deny the main bank system? It goes against business
morals,'" Son said.
But Son's exclusion from Japan's closed, clubby
business world probably accelerated his exposure to
outside ideas. He has spent much of his time since then
picking the brains of American high-tech gurus, such as
Microsoft Corp. Chairman Bill Gates, with whom he
has met 15 times in the past year. One result: Softbank
and Microsoft recently announced a joint venture,
CarPoint Japan KK, to sell automobiles here over the
Internet.
Son's best investment so far has been Yahoo, the Internet
directory and search engine. After buying Ziff-Davis
Inc., the computer publishing empire, in 1995, he went
to Ziff-Davis chief executive Eric Hippeau and said, "'I
know Ziff-Davis writes many articles on the Internet. I
don't have time to read them all. Give me one name to
invest in,'" he recalled. "And he gave me the name
Yahoo."
Yahoo was less than one year old, had 15 employees
and was losing money. But after asking dozens of
questions, Son was hooked. "So I told them, 'I want a
one-third stake in Yahoo, and I don't care how much it
costs. I'll just close my eyes and take whatever price
shows up,'" Son said. "They said, 'You're crazy.'"
Yahoo, in fact, didn't want Son's money. "They were
afraid we would try to change the company, to turn it
into a Japanese-style company," Son said with a
chuckle. "I tried for three days to convince them to take
my $100 million. For three days they refused. Finally I
said, 'I'm a crazy guy. I'm going to dump this $100
million to whoever catches it in this category of
business. This is a business I need to be in. If you won't
take this, maybe your competitors will, or maybe we'll
start a company ourselves.' So they finally agreed to
take the money."
Softbank eventually invested $338 million in Yahoo.
The value of those shares has soared to more than $10
billion this year, helping Softbank fund other
investments. Softbank is still on the prowl for U.S. deals
and continues to bring a number of Internet technologies,
services and products to Japan.
If the Internet takes off here, analysts agree, Softbank's
Japan operation is positioned to soar and produce new
jobs to replace those dying out in other industries. That
has suddenly transformed Son into a kind of role model.
Japanese investors are studying his moves, said one
analyst. And Son's business strategy was recently
praised by Sony president Idei as a model worth
emulating.
"I thought, 'Wow! That's a great compliment,' " Son said.
"We have always been seen as this strange and crazy
company."
Special correspondent Akiko Kashiwagi contributed to this
report. |
