Softbank Corporation

24-1, Nihonbashi-Hakozakicho Chuo-ku
Tokyo, 103-8501
Japan
Telephone: (03) 5642-8005
Fax: (03) 5641-3401
Web site: http://www.softbank.co.jp

Public Company
Incorporated: 1981 as Japan Softbank
Employees: 12,950
Sales: ¥8.38 trillion ($7.83 billion) (2005)
Stock Exchanges: Tokyo
Ticker Symbol: 9984
NAIC: 517110 Wired Telecommunications Carriers; 517910 Other Telecommunications; 522298 All Other Non-Depository Credit Intermediation

Softbank Corporation has reinvented itself, again, as the driving force behind Japan's fast-growing broadband market. The company, led by the charismatic Masayoshi Son, controls Yahoo! BB, the country's leading provider of broadband Internet access and related services, with a subscriber base of some six million people at the beginning of 2006. The company is also a leading provider of fixed line and international telecommunications services. Softbank has invested massively in building its own infrastructure and developing its own broadband technologies. As such, the company expects to reach download speeds of as much as 100 Mbps, along a fiber optic network of more than 12,000 kilometers. Having established a thriving broadband base, including the acquisition of Japan Telecom, Softbank has been eyeing an entry into the mobile telecommunications market as well; the company currently does not hold a cellular telephone license, however. In the meantime, the company has acquired Cable & Wireless IDC, the Japanese division of Cable & Wireless, establishing its presence in the fixed line segment. Few doubt Son's ability to conquer new horizons: Having founded the company as a personal computer wholesaler in the 1980s, Son guided its transformation into Japan's leading publisher of computer-oriented magazines, before emerging as one of the world's most ambitious Internet-focused venture capitalists. During that period, Son himself became one of the world's richest people, with a paper-based worth of some $90 billion. The company retains some of its former holdings, including subsidiaries involved in the sale of personal computers, peripherals, and software; magazine publishing; venture capital investments; as well as a stake in Aozora Bank. Softbank is listed on the Tokyo Stock Exchange. In 2005, the company posted revenues of ¥8.38 trillion ($7.83 billion).

1980S ENTREPRENEURIAL ORIGINS

Son was born in 1957 to Japanese citizens of Korean descent. By his own account, his early years were characterized by second-class citizenship and poverty. In a 1992 interview with Alan M. Webber of the Harvard Business Review, he acknowledged that, like many other Koreans in Japan, his entire family had assumed a Japanese surname, Yasumoto, in order to better assimilate into society. Son's family was able to move out of a squatter town and into the middle class by the time he reached the age of 13. At 16, Son traveled to the United States to attend high school.

The youngster flourished in his new environment, resuming his Korean surname and breezing through three grades to graduate from his California high school within a couple of weeks. Son attended Holy Names College for two years, then transferred to the University of California at Berkeley. It was there that, with the help of some professors of microcomputing, he made his first $1 million at the age of 19 by developing a pocket translator. Son sold the patent for his device to Sharp Corp., which marketed it as the Sharp Wizard. By the time he was 20, Son had earned another million importing used video game machines from Japan.

Although Son realized that it would be relatively easy to launch a business in the United States, the budding entrepreneur also knew that the Japanese culture tended to produce employees who were likely to be more loyal and work harder than their American counterparts. Consequently, he decided to return to his homeland upon his graduation from college. He spent the next 18 months researching 40 different business options ranging from software development to hospital management. Using a matrix, Son ranked each one against 25 of his own "success measures." He described a few of these to Webber in the Harvard Business Review interview: "I should fall in love with [the] business for the next 50 years at least," "the business should be unique," and "within 10 years I wanted to be number one in that particular business." The field he chose, wholesaling personal computer (PC) software, met the majority of his criteria. At the time, most software developers did not have the capital to promote their products to hardware manufacturers, and most hardware manufacturers and retailers did not have software to run on their machines. Son hoped to carve out a profitable niche as a liaison between the two groups.

At first, his 1981-formed company, Japan Softbank, was more spectacle than substance. Using a combination of previously earned and borrowed funds, Son purchased one of the biggest display areas available at a 1981 consumer electronics show in Tokyo. Having absolutely no product to offer, Son called all 12 of the software vendors he knew at the time and offered to display their wares at his booth gratis. Not surprisingly, many jumped at the opportunity. Although his exhibit, which featured a large banner proclaiming a "revolution in software distribution," caught many attendees' attention, most already had their own contacts with software vendors. The show earned the fledgling entrepreneur only one contact; luckily, it was with Japan's foremost PC retailer, Joshin Denki Co. Son negotiated exclusive rights to purchase software for the chain, then parlayed that topnotch industry connection into exclusive contracts with other firms, including Hudson Software, the country's largest vendor. Over the course of its first year in business, Japan Softbank's monthly sales increased from $10,000 to $2.3 million. By 1983, the company served more than 200 dealer outlets.

By that time, Son was pursuing additional business interests in the broader field he called "computing infrastructure." He first diversified into publishing in 1982. His original two magazine titles, Oh!PC and Oh!MZ, lost hundreds of thousands of dollars in their inaugural months due to lack of interest. But Son feared that if he dropped these sidelines clients would smell trouble, so instead he revamped the layout and threw the weight of an expensive television advertising campaign behind the project. By the early 1990s, the flagship Oh!PC enjoyed a circulation of about 140,000 and had become the forerunner of a stable of 20 Softbank-published periodicals, including the Japanese edition of PC Magazine, launched in 1989. Writing for Forbes in 1992, Andrew Tanzer noted that "the magazines rather shamelessly promote products Son distributes," an accepted practice in Japan. By the early 1990s, the division also had put out more than 300 computing books and become Japan's leading publisher of high-tech magazines.

COMPANY PERSPECTIVES

Vision: Softbank aims to leverage the power of the digital information revolution to make knowledge available to people no matter who or where they are and, by doing so, to foster the realization of a better life for all.

A lengthy bout with hepatitis sidelined Son from 1983 through 1986. Although he gave up Japan Softbank's presidency during this period, Son kept tabs on the company via computer and telecommunications equipment installed in his hospital room. His prolonged recuperation apparently gave him time to conjure up new ideas. Upon his return to Japan Softbank's helm, Son invented a "least-cost routing device" that came to form the basis of the company's DATANET telephone data division. The idea evolved when Japan's telephone monopoly, Nippon Telegraph & Telephone Corp. (NTT), was joined by three new common carriers—DDI Corporation, Teleway Japan, and Japan Telecom—in 1986. Although they offered lower long-distance rates, the inconvenience of dialing the three newcomers' additional four-digit prefixes deterred many customers from signing on. Son's computerized invention, which he described as about "the size of two cigarette packs," would automatically choose the cheapest carrier and route, then dial the appropriate number. Periodic online updates kept the routers' rate information current. Japan Softbank offered the devices free to telephone customers and made money by collecting royalties on common carriers' increased billings. In the early 1990s, Son expanded the business by offering routers installed in new telephones and fax machines.

EARLY 1990S: VENTURE CAPITALIST AND CORPORATE MATCHMAKER

Son renamed his company Softbank Corp. in 1990. Seeking ways to invest his profits, and perhaps to erect a bulwark against getting bypassed in the distribution chain, Son soon earned renown as a venture capitalist and corporate "matchmaker." Early deals paired U.S. software vendors with Japanese partners who modified American computer applications for sale in Japan. Softbank made commissions on the matchmaking, then distributed the newly modified products.

The "marriages" got bigger in the early 1990s. In 1991, Son arranged two major computer networking alliances that combined the resources of a coterie of well-known rivals. The lead company in the first venture was BusinessLand Inc., a top systems integrator in the United States. It owned 54 percent of the $20 million venture, appropriately named BusinessLand Japan Co. Softbank held another 26 percent of the equity, while Toshiba Corp., Sony Corp., Canon Inc., and Fujitsu Ltd. each controlled 5 percent. Unlike its California-based majority partner, BusinessLand Japan eschewed the retail market in favor of corporate customers. While some analysts observed that the new venture's Japanese participants would give it a leg up on pre-existing competitors such as America's Electronic Data Systems (EDS), IBM Corp., and Digital Equipment Corp., others noted a conflict of interest in having computer manufacturers among BusinessLand Japan's investors. In fact, the venture failed and was liquidated within a year.

KEY DATES

1981:

Masayoshi Son founds Japan Softbank as a wholesaler of PC software.

1982:

The company diversifies into publishing.

1989:

The company launches the Japanese edition of PC Magazine.

1990:

The company is renamed Softbank Corporation.

1994:

Softbank is taken public; the trade show division of Ziff Communications is acquired.

1995:

The company purchases 17 computer trade shows, including Comdex, from Interface Group.

1996:

Ziff-Davis Publishing Co. is acquired; Softbank gains a controlling stake in Yahoo! Inc., which goes public later in the year; an 80 percent stake in memory board maker Kingston Technology Company is acquired.

1999:

Softbank transforms itself into a holding company focusing on the Internet; a stake in Kingston Technology is divested.

2000:

Ziff-Davis is sold off; ZD Events is spun off as Key3Media Group, with Softbank retaining a significant stake; ZDNet is sold to CNET Networks; the NASDAQ Japan Market, partially owned by Softbank, is launched; a Softbank-led consortium purchases Nippon Credit Bank, Ltd., which is renamed Aozora Bank Ltd.; Softbank's stock plunges 90 percent as the Internet stock bubble bursts.

2001:

The company launches Yahoo! BB broadband service.

2002:

Yahoo! BB launches Japan's first VoIP telephone service.

2003:

Yahoo! BB launches online gaming services.

2004:

Softbank acquires Japan Telecom, becoming the leading broadband provider in Japan; Cable and Wireless IDC is acquired.

2005:

Softbank announces a partnership with Yahoo! Japan to launch an Internet television broadcasting service in 2006.

Nonetheless, Son had no trouble convincing many of those same corporations to invest in a second endeavor that same year, Novell Japan Ltd., in which Novell took a 54 percent stake. Softbank held 26 percent of the new company, while hardware manufacturers NEC, Toshiba Corp., Fujitsu Ltd., Canon Inc., and Sony Corp. each chipped in 4 percent of the equity. Although each of the latter five partners produced its own version of the networking system, all were compatible. The coalition sold network operating systems, peripherals, cables, transceivers, boards, and other network-related products. Since, according to Son's estimate, less than 5 percent of Japan's PCs were networked in 1990, the allies expected to make Novell's NetWare the industry standard there. Son predicted that the Japanese computer networking industry would "grow like hell" in a 1992 interview for the Harvard Business Review. This prediction came true: by 1994, Novell Japan Ltd. boasted $130 million in annual sales.

That same year, Son engineered what Business Week called a "sweeping alliance" involving Cisco Systems Inc., Fujitsu Ltd., Toshiba Corp., and a dozen other Japanese firms. The partners anted up a total of $40 million to fund the launch of Nihon Cisco Systems, which planned to distribute internetworking systems in Japan.

Although he was widely hailed as a "whiz kid," Son was not infallible. Within just six months in 1991, he allegedly lost $10 million in a bungled online shopping venture. Systembank, a joint venture with Perot Systems, was intended to provide systems integration for large Japanese corporations. According to a February 1995 article in the New York Times, Systembank was "quietly disbanded." In 1994, Son convinced NTT to invest $200,000 in a "video on demand" alliance. The proposed interactive system would allow subscribers to request movies and other media at their leisure. Son boldly predicted that the joint venture would have ten million customers by the start of the 21st century. But NTT, which had a similar agreement with Microsoft Corporation, did not plan to have the necessary infrastructure (i.e., fiber optic cable to households) ready for another five to ten years, which pushed back Son's anticipated timetable substantially.

Son's first postgraduate American venture, Softbank Inc., was formed in 1993 with the cooperation of Merisel Inc., Phoenix Technologies Ltd., and telemarketer Alexander and Lord. The new subsidiary planned to distribute software through the interactive Softbank On-Hand Library service. Softbank Inc.'s vice-president, Meg Tuttle, described the demo discs as "adware." Reviewer Steve Bass of PC World "fell in love" with the $10 CD-ROMs, which allowed users to "test-drive" more than 100 programs, then order and pay for the selected software online. Several big-league computer companies, including Apple Computer, IBM, and Ingram Micro, had already launched similar promotions. But other analysts and competitors nixed the idea. For example, David Goldstein, president of Channel Marketing, told PC Week 's Lawrence Aradon that offering software on compact discs would become "the Edsel of the computer industry." The venture's direct competition with one of Softbank's most important consumer groups, software retailers, broke what Steve Hamm of PC Week called one of Son's golden rules: "Don't compete with clients or suppliers." By early 1995, in fact, a number of industry analysts pronounced the venture defunct for that very reason.

MID-1990S: EXPANDING INTO "DIGITAL INFORMATION INFRASTRUCTURE"

Son took Softbank Corp. public in 1994 in an offering that valued the company at $3 billion. The founder retained a 70 percent interest in his company. Coming off the late 1994 loss of a bidding war for the U.S. magazine publishing operations of Ziff Communications Co., Son acquired that firm's trade show division for $202 million. The subsidiary's name was changed from ZD Expos to Softbank Expos. Early in 1995, Softbank made a major addition to that interest with the $800 million purchase of a package of 17 computer trade shows from Sheldon Adelson's Interface Group.

The acquisition, which was financed with at least $500 million in debt and a new offering of Softbank Corp. shares, nearly doubled Softbank's U.S. operations.

The acquisition included the Las Vegas Comdex show, which was characterized in a 1995 Wall Street Journal article as "a huge draw in the computer industry." Launched in 1979, Comdex attracted 195,000 attendees and 2,200 exhibitors to its November 1994 show. Although the event remained popular, its high prices had come under criticism. Some major exhibitors, including Compaq, Packard Bell, Oracle, and Seagate Technologies, had already opted out of the show by the time Softbank took over. Son expressed confidence that he could revitalize the event without a total revamp, citing the fact that exhibit space for the 1995 show was already 90 percent booked by the previous spring. Expansion plans for the new businesses included the first French Softbank Expo in 1995 and the premier Japanese and British Comdexes in 1996.

Son's aggressive approach to acquisitions continued in 1996. In February Softbank was able to secure Ziff-Davis Publishing Co., which Son had failed to acquire in late 1994, through a $1.8 billion purchase price, paid to Forstmann Little & Co. (the firm that had outbid it the first time around). Ziff-Davis was the leading publisher of computer and high-tech magazines in the United States and had a several-years-long relationship with Softbank involving licensing deals to publish Japanese versions of Ziff computer magazines, including PC Magazine.

Son's expansion into trade shows and publishing was part of his aim to become the world's leading provider of "digital information infrastructure." Along these lines were two additional 1996 developments. In 1995 Softbank had already purchased a 5 percent stake in Yahoo! Inc., initially the provider of a directory for the Internet before evolving into the premier Internet portal. In April 1996 Softbank increased this stake to a controlling 37 percent, marking the firm's first major investment in the Internet; later in 1996 Yahoo! was taken public. Son was aggressive not only with acquisitions but also in exploiting synergies between his burgeoning holdings. For example, the new Ziff-Davis magazine title Internet Life was recast as Yahoo! Internet Life ; positioned as the "TV Guide of the Internet," this title's advertising rate base reached 200,000 by the end of 1996. Softbank and Yahoo! also set up a joint venture called Yahoo! Japan Corporation, 60 percent owned by Softbank, which created a Japanese-language version of Yahoo! that quickly became the most visited web site in Japan.

Consummated in September 1996 was the $1.51 billion purchase of an 80 percent stake in Kingston Technology Company, a privately held maker of PC memory boards based in Fountain Valley, California. The acquisitions and investments in Softbank, Ziff-Davis, Yahoo!, and Kingston were part of a clear and rapid expansion outside of Japan, concentrating on the world's key technology market, that of the United States. Yet another 1996 development, meanwhile, was centered on Japan as Softbank entered the field of digital satellite broadcasting through the establishment of Japan Sky Broadcasting Co., Ltd., a joint venture with Rupert Murdoch's News Corporation Limited.

Softbank's spectacular series of acquisitions resulted in the doubling of net sales from 1996 to 1997, from ¥171.1 billion ($1.61 billion) to ¥359.74 billion ($2.9 billion), and a 94 percent jump in pretax profits, from ¥15.98 billion ($150.3 million) to ¥29.57 billion ($238.3 million). At the same time, long-term debt used to fund the company's expansion was ballooning, reaching ¥595.03 billion ($4.79 billion) by the end of 1997. Concern about the debt load, coupled with slower sales growth and falling margins, as well as allegations of improprieties in the company's financial disclosures (which were widely disseminated in a best-selling book in Japan called Inside Revelation: Softbank's Warped Management, whose publisher, Yell Books, was sued by Softbank), sent Softbank's stock plunging from ¥8,450 in early 1997, its peak for the year, to a low of ¥1,670 by November of that year. Another setback for Softbank in 1997 was a serious dilution of its initial 50 percent stake in Japan Sky Broadcasting when Sony Corporation and Fuji TV joined the venture followed by the merging of it with a competitor, Japan Digital Broadcasting Services. Softbank's stake was reduced to 11.4 percent.

To raise much needed cash, Son began seeking listings for some of his subsidiary companies. In November 1997 Yahoo! Japan was taken public on the Japanese over-the-counter (OTC) market, with Softbank keeping a 51 percent stake. Then in April 1998, 26 percent of stock in the renamed Ziff-Davis Inc. was sold through an initial public offering (IPO) on the New York Stock Exchange, raising $400 million. Prior to its listing, Ziff-Davis was given ownership of Softbank's exhibits operations, which were initially called ZD Comdex and Forums Inc. but were soon renamed ZD Events Inc., as well as ZDNet, a web site featuring online versions of a number of Ziff-Davis publications. Meanwhile, Softbank's stock began trading on the first section of the Tokyo Stock Exchange in January 1998.

"JAPAN'S BILL GATES" IN THE LATE 1990S

The late 1990s saw Softbank increase its investments in the Internet significantly, during what would eventually be viewed as the Internet stock bubble. By mid-1999, Softbank had significant stakes in Yahoo!, Yahoo! Japan, ZDNet, community-oriented portal GeoCities, e-commerce "superstore" Buy-com Inc., consumer loan specialist E-Loan Inc., and online broker E∗Trade Group Inc. Through joint ventures, Softbank had helped establish several more Japanese versions of successful American web sites, including E-Loan Japan, E∗Trade Japan, GeoCities Japan, and Morningstar Japan, the latter a venture with Morningstar Inc. that set up a web site providing Japanese financial news and market analysis. Although not all of Son's Internet investments were successful, he was able to ride the $338 million he had invested in Yahoo! to spectacular heights. Yahoo!'s soaring stock price led Softbank's investment to be worth more than $10 billion by mid-1999. Overall, the $2 billion that Son had invested in 100 Internet companies was worth more than $17 billion by this time. In March 1999 Ziff-Davis created a tracking stock for ZDNet and sold 16 percent of the unit to the public through an IPO. In the topsy-turvy world of the Internet stock bubble, by mid-1999 ZDNet had a market capitalization greater than that of Ziff-Davis, despite Ziff-Davis's 84 percent stake in ZDNet.

In June 1999 Softbank Corp. transformed itself into a holding company focusing on the Internet. The finance-oriented Internet holdings, including E∗Trade and Morningstar Japan, were combined within a new subsidiary called Softbank Finance Corporation. Softbank's technology services related to e-commerce were bundled within Softbank Technology Corp., which was taken public in July 1999 on the Japanese OTC market. That same month, Softbank sold its stake in Kingston Technology back to the company's founders for $450 million, in a move to divest non-Internet assets. Also in July, Softbank began exploring strategic options related to Ziff-Davis, including the possible sale of the company in what would be a further concentration on the Internet. One month earlier, Softbank joined with the National Association of Securities Dealers (NASDAQ) to create a joint venture called NASDAQ Japan, Inc. to set up a Japanese version of the NASDAQ. In June 2000 the NASDAQ Japan Market commenced operations with eight listed companies.

In early 2000 Softbank began selling off Ziff-Davis piecemeal, initially planning to retain ZDNet. In April 2000 the magazine unit was sold for $780 million to a partnership headed by Willis Stein & Partners, L.P., emerging as Ziff Davis Media Inc. The ZD Events unit was spun off to shareholders as a new company called Key3Media Group, Inc., in which Softbank retained a sizable stake. ZDNet would have then become a stand-alone, publicly traded company 45 percent owned by Softbank. But CNET Networks Inc., ZDNet's arch-rival, stepped in with a takeover offer, which was accepted, resulting in a $1.6 billion-in-stock acquisition later in 2000.

By February 1999, Son's emphasis on the Internet had helped send his company's share price soaring to ¥60,667 ($592). At that point, Softbank's market value was $190 billion. By late November, the share price had plunged more than 90 percent to ¥5,970 ($53.87). The company's market value dropped by $172 billion in just nine months, reaching $17.9 billion. During this precipitous decline, Softbank was forced to abandon plans to sell shares in five of its main subsidiaries: Softbank E-Commerce Corp., Softbank Finance, Softbank Media & Marketing Corp., Softbank Broadmedia Corporation, and Softbank Networks Inc. Later in 2000, faced with continued stock market doldrums, Softbank put the brakes on joint ventures in Europe with News Corporation and Vivendi, both of which aimed at creating European versions of U.S. Internet companies. In September 2000, a Softbank-led consortium purchased Nippon Credit Bank, Ltd., which had collapsed in late 1998, from the Japanese government for $932 million. Softbank held a 49 percent stake in the bank, which was renamed Aozora Bank Ltd., as Softbank became the first nonfinancial company to enter the Japanese banking sector. Both NASDAQ Japan and Aozora Bank were viewed by Son as underpinnings of a new financial infrastructure in Japan that might foster the development of the Internet-centered economy—and in turn, Softbank—by remedying the chronic shortage of capital faced by the nation's venture firms.

BROADBAND LEADER IN THE 2000S

At the lowest point during the crash of the dot-com market and the subsequent collapse of the international telecommunications market, Softbank's market valuation had dropped back to just $15.5 billion. Son's personal net worth dropped accordingly, and by 2001 had slipped to as low as $1.1 billion. Son's difficulties continued into the new decade, particularly after his partners moved to shut down NASDAQ Japan. Although Softbank's own investment in the exchange had been minimal, the company lost a much needed outlet for its rapidly devaluing holdings. As a result, the company was forced to write off huge portions of its investments, which included stakes in some 600 companies, while selling off parts of its other investments, including some of its stake in Yahoo!, to finance its continuing operations.

Yet Son remained resilient. Indeed, Son even seemed somewhat relieved that the dot-com bubble had burst. As he told Forbes : "The market became filled with people who had no understanding of the Internet. They had no passion for the Internet, they just had a passion for making money. It was a boom without belief. With the market correction, those who are passionate just about making money are leaving. Now it is a better situation in which to make investments. Prices are more realistic."

Even as the venture capital market was in the process of self-destructing, Son had already found a new avenue for Softbank's future growth: broadband. At the beginning of the 2000s, Japan had fallen behind most of the world's developed markets in the rollout of broadband technologies, in large part because of a lack of interest from NTT. Son recognized the opportunity to build Softbank's own high-speed network, leading the development of proprietary technology that enabled the deployment of broadband speeds of 10 Mbps, the fastest in the world at the time, and which was capable of being scaled up to 100 Mbps.

Son did not hesitate to invest billions in the construction of the company's network, selling off large swathes of its shares in Yahoo! especially in order to finance the infrastructure development. Nonetheless, the company carefully maintained control of Yahoo! Japan, redeveloping that brand into Japan's first commercial broadband service, Yahoo! BB. Son's passion for the company's new broadband strategy was evident in his own devotion to the network's creation. Leaving his office at Softbank's headquarters behind, Son went to work alongside the Yahoo! BB engineering team, putting in 15-hour days, including weekends, with no break for vacation for some 18 months. The company also supported the rollout of its new services through strong advertising spending, and even, at one point, handed out free modems on the street to passersby.

Yahoo! BB was slow in taking off, until Son recognized the potential of new voice-over-Internet protocols (VoIP), and of offering broadband-based telephone services. NTT remained a major stumbling block for the company, in its refusal to connect the company's network to the country's telephone system, despite the government's orders that it do so. Famously, Son had his way by threatening to immolate himself during a meeting with Japan's communications ministry, and the company launched its VoIP service in 2002.

Subscribers flocked to Yahoo! BB to take advantage of its telephone services, which included free calls among Yahoo! BB subscribers and low dialing rates to NTT's fixed line network and internationally as well. Before long, NTT was forced to respond with their own broadband offers. By the mid-2000s, Son was credited with having transformed Japan from an Internet "backwater" to the world's most vibrant telecommunications market. By 2004, the company had signed up more than four million subscribers.

Yet Softbank was soon overtaken by its rivals, which, backed by NTT's muscle, quickly expanded their networks beyond Softbank's own somewhat limited, mostly coaxial-based network. Son struck back, however, with the acquisition of Japan Telecom in 2004. Paying some $3.1 billion, Softbank acquired Japan's third largest fixed line telecommunications group, with more than 600,000 residential subscribers, 150,000 corporate clients, and, most important, a national network of more than 12,000 kilometers of fiber optic cable. The addition of Japan Telecom once again placed Softbank at the head of the country's fast-growing broadband market.

Softbank continued to roll out new services to attract new customers and raise spending of its existing customers. The company added online gaming services in 2003, and its own broadband-based television services, including video-on-demand and pay-per-view movie offerings. Nonetheless, the cost of building its network remained high, and the company continued to post massive losses into the mid-2000s, forcing it to continue sales of parts of its other investments, including much of its remaining stake in Yahoo!.

In the meantime, Son began lobbying the Japanese government to allow new entrants to the country's mobile telecommunications market, including, Son hoped, Softbank. Son even went so far as to file a lawsuit against the communications ministry. Challenging the ministry in this way was not without risks, not the least because of the risk of creating a new Softbank rival. As Son told Business Week : "I'm getting smarter. It's still business suicide, but it's better than physically killing myself." In the meantime, Son remained committed to expanding Softbank's fixed line presence. At the end of 2004, the company acquired Cable & Wireless IDC, the Japanese subsidiary of international telecom group Cable & Wireless. That acquisition gave Son control of Japan's second largest international voice and data telecommunications business.

Into 2006, Softbank continued to seek new means of expanding its service offering, and its subscriber revenues. In December 2005, for example, the company announced the formation of a partnership with Yahoo! Japan to launch Internet-based television broadcasts. The two companies expected to launch the service as early as March 2006. Masayoshi Son had successfully established himself as a leading fixture in Japan's telecommunications market.

                                        April D. Gasbarre

                  Updated, David E. Salamie; M. L. Cohen

PRINCIPAL SUBSIDIARIES

Abovenet Japan, Inc.; Alps Mapping K.K.; Asia Vision Japan Inc.; Bb Backbone Corporation; Bb Cable Corporation; Bb Marketing Corporation; Bb Mobile Corporation; Bb Serve, Inc.; Bbix, Inc.; Best Broadband Corporation; Blue Planet Corporation; Bridalnet, Inc.; Broadband Japan Corporation; Carview Corporation; Cj Internet Japan Corporation; Cmnet Corporation; Creativebank Inc.; Deecorp Limited; Diamond.Com Corporation; Ebest Corporation; Greenfield Corporation; Gungho Online Entertainment, Inc.; Hr Solutions Corporation; Investoria Inc.; Ip Revolution, Inc.; Japan Telecom America, Inc.; Japan Telecom China Co., Ltd.; Japan Telecom Co., Ltd.; Japan Telecom Information Service Co., Ltd.; Japan Telecom Network Information Service Co., Ltd.; Japan Telecom Singapore Pte. Ltd.; Japan Telecom UK Ltd.; Jtos Co., Ltd.; Laox Bb Corporation; Macs Broadband Corporation; Nc Japan K.K.; Net Culture Kk; Netrust, Ltd.; Overseas Human Resources, Inc.; Oy Gamecluster Ltd.; Sb China Holdings Pte Ltd; Seven and Y Corporation (formerly E-Shopping! Books Corporation); Softbank Bb Corporation; Softbank Bb Corporation; Softbank Broadmedia Corporation; Softbank Capital Partners; Softbank Frameworks Corporation; Softbank Human Capital Corporation; Softbank Idc Corporation; Softbank Korea Co., Ltd.; Softbank Logistics Corporation; Softbank Media & Marketing Corporation; Softbank Publishing Inc.; Softbank Technology Corporation; Softbank Technology Ventures Iv L.P.; Softbank Technology Ventures V L.P.; Tavigator, Inc.; Te Co. Ltd.; Technoblood Inc.; Tmsw Corporation; Trustguard Co., Ltd.; Vector Inc.; Xdrive Japan K.K.; Yahoo! Japan Corpora-tion; Yahoo! Deutschland GmbH; Yahoo! France S.A.S.; Yahoo! Korea Corporation; Yahoo! UK Limited; Yamada Broadband Corporation; Y's Insurance Inc.

PRINCIPAL COMPETITORS

Nippon Telegraph and Telephone Corporation; Tokyo Electric Power Company Inc.; Vodafone Holdings K.K.; NTT Communications Corporation; Hikari Tsushin Inc.; Commuture Corporation; Bellsystem 24 Inc.; Kanda Tsushinki Company Ltd.; Seibu Electric Industry Company Ltd; Okinawa Cellular Telephone Co.; TTK Company Ltd.; Oi Electric Company Ltd.

FURTHER READING

"After the Party," Economist, May 18, 1996, p. 65.

Aragon, Lawrence, "Off and Running," PC Week, March 14, 1994, p. A1.

Bass, Steve, "Hot Picks for the Home Office," PC World, March 1995, p. 241.

"The Best Entrepreneurs," Business Week, January 9, 1995, p. 112.

Bickers, Charles, "Japan's Mr. Internet: Softbank's Bold Moves Cause Ripples in Japan Inc.," Far Eastern Economic Review, July 29, 1999, pp. 11-12.

Bremner, Brian, "Hard Truths for Softbank," Business Week, August 9, 2004, p. 38.

――――――, "Is Softbank Sinking? Don't Bet on It," Business Week, April 24, 2000, p. 144.

――――――, "Why Softbank Is Shouting 'Yahoo!,'" Business Week, September 7, 1998, p. 48.

Bremner, Brian, and Amy Cortese, "Cyber-Mogul: To Conquer the Net, Masayoshi Son Takes to the High Wire," Business Week, August 12, 1996, pp. 56-62.

Bremner, Brian, and Linda Himelstein, "Softbank's Cyber Keiretsu," Business Week, April 5, 1999, p. 24.

Bulkeley, William M., Jim Carlton, and Norihiko Shirouzu, "Japanese Firm to Buy Comdex Computer Show," Wall Street Journal, February 14, 1995, p. A3.

Burke, Steven, "$20 Million Joint Venture Gives BusinessLand Foothold in Japan," PC Week, June 11, 1990, p. 119.

Butler, Steven, "Empire of the Son: The Bill Gates of Japan Controls a Huge Chunk of the Internet," U.S. News and World Report, July 5, 1999, pp. 48, 50.

Desmond, Edward W., "Japan's Top Technology Investor Takes a Hit," Fortune, September 8, 1997, pp. 150-52.

Gilley, Bruce, Chester Dawson, and Dan Biers, "Internet Warrior on the Defensive," Far Eastern Economic Review, November 16, 2000, pp. 54+.

"Grounded Internet High Flyer Takes on NTT," Business Asia, August 2003, p. 21.

Hamilton, David P., "Comdex Owner Doesn't Plan to Alter Show," Wall Street Journal, February 21, 1995, p. A13B.

Hamilton, David P., and Norihiko Shirouzu, "Softbank to Buy Memory Board Maker," Wall Street Journal, August 16, 1996, p. A3.

Hamlin, Kevin, "Son Rise, Son Set?," Institutional Investor International Edition, June 2001, p. 29.

Hamm, Steve, "The Rising Son," PC Week, April 10, 1995, p. A1.

"Heat Turns Up on the Rising Son," Financial Times, November 13, 1997, p. 39.

Holyoke, Larry, "Japan's Hottest Entrepreneur Hits the U.S.," Business Week, February 27, 1995, p. 118G.

Ip, Greg, and Bill Spindle, "NASDAQ Plans to Set Up a New Stock Market in Japan: Softbank to Invest in Proposed Project," Wall Street Journal, June 16, 1999, p. A19.

Kunii, Irene M., "Get Those Stun Guns Ready: Here Comes Masayoshi Son," Business Week, August 4, 2003, p. 24.

Landers, Peter, "Prodigal Son: For 'Japan's Bill Gates,' Last Year Was Daunting. Can Masayoshi Son Come Back?," Far Eastern Economic Review, January 22, 1998, pp. 42+.

Lipin, Steven, "Persistence Pays Off in Second Sale of Ziff-Davis," Wall Street Journal, December 29, 1995, p. C1.

――――――, "Ziff-Davis Unit of Forstmann Set to Be Sold," Wall Street Journal, November 9, 1995, p. A3.

McCartney, Laton, "The Rising Son," Upside, April 1997, pp. 108-10.

Moffett, Sebastian, "The Entrepreneur: Softbank's Masayoshi Son Builds an Unconventional Empire," Far Eastern Economic Review, November 7, 1996, p. 206.

――――――, "A Whole New Ballgame," Far Eastern Economic Review, July 4, 1996, p. 70.

Ono, Kazuyuki, "Fortunate Son: A One-of-a-Kind Success Story," Tokyo Business Today, October 1995, pp. 26+.

Patch, Kimberly, "'Virtual Shopping' Via CD-ROM," PC Week, July 12, 1993, p. 6.

Pollack, Andrew, "A Japanese Gambler Hits the Jackpot with Softbank," New York Times, February 19, 1995, Sec. 3, p. 10.

Rocks, David, "Setting Fire to the Cell-Phone Market," Business Week, November 1, 2004, p. 22.

Rowley, Ian, and Hiroko Tashiro, "Where the Net Has Telecom on the Run," Business Week, June 27, 2005, p. 28.

"Setting Son," Economist, August 24, 2002.

Shirouzu, Norihiko, and David P. Hamilton, "Softbank's Buying Spree May Be Hard Act to Follow," Wall Street Journal, August 19, 1996, p. B4.

Smith, Dawn, "Demo Disk Double-Take," Marketing Computers, October 1993, pp. 18-19.

"Softbank, Yahoo Start Internet Television Service," Reuters, December 27, 2005.

Spindle, Bill, "Japan's Softbank Hits Some Rough Road," Wall Street Journal, October 17, 1997, p. A16.

Strom, Stephanie, "Its Own Stock Battered, Softbank Abandons Spinoff Plan," New York Times, August 2, 2000, p. C4.

Sugawara, Sandra, "Masayoshi Son Was Among the First to Flout Japan's Business Establishment," Washington Post, May 9, 1999, p. H1.

Tanzer, Andrew, "Hot Hands," Forbes, May 11, 1992, p. 182.

Umezawa, Masakuni, "The New Golden Age of Wireless," Tokyo Business Today, November 1994, pp. 10-12.

Webber, Alan M., "Japanese-Style Entrepreneurship: An Interview with Softbank's CEO, Masayoshi Son," Harvard Business Review, January-February 1992, pp. 93-103.

Weinberg, Neil, "Overreaction," Forbes, February 9, 1998, pp. 47-48.

Weinberg, Neil, and Amy Feldman, "Bubble, Bubble …," Forbes, March 11, 1996, p. 42.

Softbank Corp.

3-42-3
Nihonbashi-Hanacho
Chuoku Tokyo 103
Japan
(81) 3-5642-8020

Public Company
Incorporated: 1981
Employees: 1,700
Sales: $900 million
SICs: 5045 Computers Peripheral Equipment & Software

Softbank Corp. ranked as Japan’s largest software wholesaler and top publisher of computer magazines and books. The company also gained a reputation as a notable software venture capitalist. In 1995, Softbank marked its thirteenth anniversary and its first year as a publicly traded business by posting over $900 million in annual sales. The Tokyo-based firm was founded and led by Masayoshi Son (rhymes with “lone”), a self-promoting 34-year-old whose rapid rise earned him the nickname “the Bill Gates of Japan.” Son possessed a rare combination of character traits as an inventor, businessman, and “consummate salesman.” Although he hailed from a country that was not often distinguished for encouraging entrepreneur-ship, the editors of Business Week ranked him one of the best entrepreneurs of 1994. Son was often cited as a driving force behind the development of Japan’s $2.75 billion PC software market, of which his company controlled a sizable share. Although the firm diversified widely during its relatively brief history, software wholesaling still accounted for over half of annual revenues in 1994.

Son was born in 1957 to Japanese citizens of Korean descent. By his own account, his early years were characterized by second-class citizenship and poverty. In a 1992 interview with Alan M. Webber of the Harvard Business Review, he acknowledged that, like many other Koreans in Japan, his entire family had assumed a Japanese surname, Yasumoto, in order to better assimilate into society. Son’s family was able to move out of a squatter town and into the middle class by the time he reached the age of 13. At 16, Son traveled to the United States to attend high school.

The youngster flourished in his new environment, resuming his Korean surname and breezing through three grades to graduate from his California high school within a couple of weeks. Son attended Holy Names College for two years, then transferred to the University of California at Berkeley. It was there that, with the help of some professors of microcomputing, he made his first $1 million at the age of 19 by developing a pocket translator. Son sold the patent for his device to Sharp Corp., which marketed it as the Sharp Wizard. By the time he was 20, Son had earned another million importing used video game machines from Japan.

Although Son realized that it would be relatively easy to launch a business in the United States, the budding entrepreneur also knew that the Japanese culture tended to produce employees who were likely to be more loyal and work harder than their American counterparts. Consequently, he decided to return to his homeland upon his graduation from college. He spent the next 18 months researching 40 different business options ranging from software development to hospital management. Using a matrix, Son ranked each one against 25 of his own “success measures.” He described a few of these to Webber in the Harvard Business Review interview: “I should fall in love with [the] business for the next 50 years at least;” “the business should be unique;” and “within 10 years I wanted to be number one in that particular business.” The field he chose— wholesaling personal computer (PC) software—met the majority of his criteria. At the time, most software developers did not have the capital to promote their products to hardware manufacturers, and most hardware manufacturers and retailers did not have software to run on their machines. Son hoped to carve out a profitable niche as a liaison between the two groups.

At first, his Softbank Corp. was more spectacle than substance. Using a combination of previously earned and borrowed funds, Son purchased one of the biggest display areas available at a 1981 consumer electronics show in Tokyo. Having absolutely no product to offer, Son called all 12 of the software vendors he knew at the time and offered to display their wares at his booth gratis. Not surprisingly, many jumped at the opportunity. Although his exhibit, which featured a large banner proclaiming a “revolution in software distribution,” caught many attendees’ attention, most already had their own contacts with software vendors. The show earned the fledgling entrepreneur only one contact; luckily, it was with Japan’s foremost PC retailer, Joshin Denki. Son negotiated exclusive rights to purchase software for the chain, then parlayed that top-notch industry connection into exclusive contracts with other firms, including Hudson Software, the country’s largest vendor. Over the course of its first year in business, Softbank’s monthly sales mushroomed from $10,000 to $2.3 million. By 1983, the company served over 200 dealer outlets.

By that time, Son was already pursuing additional business interests in the broader field he called “computing infrastructure.” He first diversified into publishing. His first two magazine titles, Oh!PC and Oh!MZ, lost hundreds of thousands of dollars in their inaugural months due to lack of interest. But Son feared that if he dropped these sidelines clients would smell trouble, so instead he revamped the layout and threw the weight of an expensive television advertising campaign behind the project. By the early 1990s, the flagship Oh!PC enjoyed a circulation of about 140,000 and had become the forerunner of a stable of 20 Softbank-published periodicals, including the Japanese edition of PC Week. Writing for Forbes in 1992, Andrew Tanzer noted that “the magazines rather shamelessly promote products Son distributes,” an accepted practice in Japan. By the early 1990s, the division had also put out over 300 computing books and become Japan’s leading publisher of high-tech magazines.

A lengthy bout with hepatitis sidelined Son from 1983 through 1986. Although he gave up Softbank’s presidency during this period, Son kept tabs on the company via computer and telecommunications equipment installed in his hospital room. His prolonged recuperation apparently gave him time to conjure up new ideas. Upon his return to Softbank’s helm, Son invented a “least-cost routing device” that came to form the basis of the company’s DATANET telephone data division. The idea evolved when Japan’s telephone monopoly, Nippon Telegraph & Telephone Corp. (NTT), was joined by three new common carriers—DDI Corporation, Teleway Japan, and Japan Telecom—in 1986. Although they offered lower long-distance rates, the inconvenience of dialing the three newcomers’ additional four-digit prefixes deterred many customers from signing on. Son’s computerized invention, which he described as about “the size of two cigarette packs,” would automatically choose the cheapest carrier and route, then dial the appropriate number. Periodic on-line updates kept the routers’ rate information current. Softbank offered the devices free to telephone customers and made money by collecting royalties on common carriers’ increased billings. In the early 1990s, Son expanded the business by offering routers installed in new telephones and fax machines.

Seeking ways to invest his profits—and perhaps to erect a bulwark against getting bypassed in the distribution chain— Son soon earned renown as a venture capitalist and corporate “matchmaker.” Early deals paired U.S. software vendors with Japanese partners who modified American computer applications for sale in Japan. Softbank made commissions on the matchmaking, then distributed the newly modified products.

The “marriages” got bigger in the early 1990s. In 1991, Son arranged two major computer networking alliances that combined the resources of a coterie of well-known rivals. The lead company in the first venture was BusinessLand Inc., a top systems integrator in the United States. It owned 54 percent of the $20 million venture, appropriately named BusinessLand Japan Co. Softbank held another 26 percent of the equity, while Toshiba Corp., Sony Corp., Canon Inc., and Fujitsu Ltd. each controlled five percent. Unlike its California-based majority partner, BusinessLand Japan eschewed the retail market in favor of corporate customers. While some analysts observed that the new venture’s Japanese participants would give it a leg up on pre-existing competitors like America’s Electronic Data Systems (EDS), IBM Corp., and Digital Equipment Corp., others noted a conflict of interest in having computer manufacturers among BusinessLand Japan’s investors. In fact, the venture failed and was liquidated within a year.

Nonetheless, Son had no trouble convincing many of those same corporations to invest in a second endeavor that same year. America’s Novell Inc. owned 54 percent of and lent its name to the venture, Novell Japan Ltd. Softbank held 26 percent of the new company, while hardware manufacturers NEC, Toshiba Corp., Fujitsu Ltd., Canon Inc., and Sony Corp. each chipped in four percent of the equity. Although each of the latter five partners produced its own version of the networking system, all were compatible. The coalition sold network operating systems, peripherals, cables, transceivers, boards, and other network-related products. Since, according to Son’s estimate, less than five percent of Japan’s PCs were networked in 1990, the allies expected to make Novell’s NetWare the industry standard there. Son predicted that the Japanese computer networking industry would “grow like hell” in a 1992 interview for the Harvard Business Review. This prediction came true: by 1994, Novell Japan Ltd. boasted $130 million in annual sales.

That same year, Son engineered what Business Week called a “sweeping alliance” involving Cisco Systems Inc., Fujitsu Ltd., Toshiba Corp., and a dozen other Japanese firms. The partners anted up a total of $40 million to fund the launch of Nihon Cisco System, which planned to distribute internetworking systems in Japan.

Although he was widely hailed as a “whiz kid,” Son was not infallible. Within just six months in 1991, he allegedly lost $10 million in a bungled on-line shopping venture. Systembank, a joint venture with H. Ross Perot’s Perot Systems, was intended to provide systems integration for large Japanese corporations. According to a February 1995 article in the New York Times, Systembank was “quietly disbanded.” In 1994, Son convinced NTT to invest $200,000 in a “video on demand” alliance. The proposed interactive system would allow subscribers to request movies and other media at their leisure. Son boldly predicted that the joint venture would have 10 million customers by the turn of the century. But NTT, which had a similar agreement with Microsoft Corporation, did not plan to have the necessary infrastructure (i.e., fiber optic cable to households) ready for another five to ten years, which pushed back Son’s anticipated timetable substantially.

Son’s first post-graduate American venture, Softbank Inc., was formed in 1993 with the cooperation of Merisel Inc., Phoenix Technologies Ltd., and telemarketer Alexander and Lord. The new subsidiary planned to distribute software through the interactive Softbank On-Hand Library service. Softbank Inc.’s vice-president, Meg Tuttle, described the demo disks as “adware.” Reviewer Steve Bass of PC World “fell in love” with the $10 CD-ROMs, which allowed users to “test-drive” over 100 programs, then order and pay for the selected software on-line. Several big-league computer companies, including Apple Computer, Inc., IBM Corp., and Ingram Micro Inc., had already launched similar promotions. But other analysts and competitors ballyhooed the idea. For example, David Goldstein, president of Channel Marketing, told PC Week’s Lawrence Aradon that offering software on compact disks would become “the Edsel of the computer industry.” The venture’s direct competition with one of Softbank’s most important consumer groups, software retailers, broke what Steve Hamm of PC Week called one of Son’s golden rules: “don’t compete with clients or suppliers.” By early 1995, in fact, a number of industry analysts pronounced the venture defunct for that very reason.

Son took Softbank Corp. public in 1994 in an offering that valued the company at $3 billion. The founder retained a 70 percent interest in his company. Coming off the late 1994 loss of a bidding war for the U.S. magazine publishing operations of Ziff Communications Co., Son acquired that firm’s trade show division for $202 million. The subsidiary’s name was changed from ZD Expos to Softbank Expos. Early in 1995, Softbank made a major addition to that interest with the $800 million purchase of a package of 17 computer trade shows from Sheldon Adelson’s Interface Group. The acquisition, which was financed with at least $500 million in debt and a new offering of Softbank Corp. shares, nearly doubled Softbank’s U.S. operations.

The acquisition included the Las Vegas Comdex show, which was characterized in a 1995 Wall Street Journal article as “a huge draw in the computer industry.” Launched in 1979, Comdex attracted 195,000 attendees and 2,200 exhibitors to its November 1994 show. Although it remained popular, the event’s high prices had come under criticism in recent years. Some major exhibitors, including Compaq, Packard Bell, Oracle, and Seagate Technologies, had already opted out of the show by the time Softbank took over. Son expressed confidence that he could revitalize the event without a total revamp, citing the fact that exhibit space for the 1995 show was already 90 percent booked by the previous spring. Expansion plans for the new businesses included the first French Softbank Expo in 1995 and the premier Japanese and British Comdexes in 1996.

In 1995, 37-year-old Son predicted to Steve Hamm of PC Week that he would “do something big” while in his 40s. While it seemed likely that he would stay within the bounds of the computer industry, potential rivals within that very broad category were expected to keep a close eye on the movements of this innovative competitor.

Further Reading

Aragon, Lawrence, “Off and Running,” PC Week, March 14, 1994, p. A1.

Bass, Steve, “Hot Picks for the Home Office,” PC World, March 1995, p. 241.

“The Best Entrepreneurs,” Business Week, January 9, 1995, p. 112.

Burke, Steven, “$20 Million Joint Venture Gives BusinessLand Foothold in Japan,” PC Week, June 11, 1990, p. 119.

Hamilton, David P., “Comdex Owner Doesn’t Plan to Alter Show,” Wall Street Journal, February 21, 1995, p. A13B.

Hamm, Steve, “The Rising Son,” PC Week, April 10, 1995, p. A1.

Holyoke, Larry, “Japan’s Hottest Entrepreneur Hits the U.S.,” Business Week, February 27, 1995, p. 118G.

Patch, Kimberly, “‘Virtual Shopping’ Via CD-ROM,” PC Week, July 12, 1993, p. 6.

Pollack, Andrew, “Computer Exhibition Purchased,” New York Times, February 14, 1995, pp. C1(N), D1(L).

_____, “A Japanese Gambler Hits the Jackpot with Softbank,” New York Times, February 19, 1995, sec. 3, p. 10.

Smith, Dawn, “Demo Disk Double-Take,” Marketing Computers, October 1993, pp. 18-19.

Tanzer, Andrew, “Hot Hands,” Forbes, May 11, 1992, p. 182.

Umezawa, Masakuni, “The New Golden Age of Wireless,” Tokyo Business Today, November 1994, pp. 10-12.

Webber, Alan M., “Japanese-Style Entrepreneurship: An Interview with Softbank’s CEO, Masayoshi Son,” Harvard Business Review, January-February 1992, pp. 93-103.

—April D. Gasbarre

Softbank Corp.

24-1, Nihonbashi-Hakozakicho
Chuo-ku
Tokyo 103-8501
Japan
Telephone: (03) 5642-8005
Fax: (03) 5641-3401
Web site: http://www.softbank.co.jp

Public Company
Incorporated: 1981 as Japan Softbank
Employees: 6,865
Sales: ¥423.22 billion (US$3.99 billion) (2000)
Stock Exchanges: Tokyo
Ticker Symbol: 9984
NAIC: 523910 Miscellaneous Intermediation; 551112 Offices of Other Holding Companies

Softbank Corp. is a holding company whose primary interest is the Internet. The company holds stakes in more than 400 Internet companies, serving as one of the leading Internet-oriented venture capital firms. Among Softbank’s key Internet holdings are stakes in Yahoo! Inc., Yahoo Japan Corporation, E*Trade Group Inc., and Morningstar Japan K.K. Other holdings include Nasdaq Japan, Inc., trade show operator Key3Media Group Inc., and a 49 percent stake in Aozora Bank Ltd., the former Nippon Credit Bank Ltd., which failed in late 1998 and was then bought from the Japanese government by a Softbank-led consortium in September 2000. Softbank was founded and led by Masayoshi Son (rhymes with“lone”), a self-promoting 24-year-old whose rapid rise earned him the nickname“the Bill Gates of Japan.”Son possessed a rare combination of character traits as an inventor, businessman, and“consummate salesman.”Although he hailed from a country that was not often distinguished for encouraging entrepreneur-ship, the editors of Business Week ranked him one of the best entrepreneurs of 1994. Originating as a wholesaler of PC software, Softbank by the early 1990s had branched out into computer magazine publishing and computer trade shows, as well as becoming a notable software venture capitalist. The firm’s shift to the Internet began in 1996 with the purchase of a controlling interest in one of the Web pioneers, Yahoo!

1980s Entrepreneurial Origins

Son was born in 1957 to Japanese citizens of Korean descent. By his own account, his early years were characterized by second-class citizenship and poverty. In a 1992 interview with Alan M. Webber of the Harvard Business Review, he acknowledged that, like many other Koreans in Japan, his entire family had assumed a Japanese surname, Yasumoto, in order to better assimilate into society. Son’s family was able to move out of a squatter town and into the middle class by the time he reached the age of 13. At 16, Son traveled to the United States to attend high school.

The youngster flourished in his new environment, resuming his Korean surname and breezing through three grades to graduate from his California high school within a couple of weeks. Son attended Holy Names College for two years, then transferred to the University of California at Berkeley. It was there that, with the help of some professors of microcomputing, he made his first $1 million at the age of 19 by developing a pocket translator. Son sold the patent for his device to Sharp Corp., which marketed it as the Sharp Wizard. By the time he was 20, Son had earned another million importing used video game machines from Japan.

Although Son realized that it would be relatively easy to launch a business in the United States, the budding entrepreneur also knew that the Japanese culture tended to produce employees who were likely to be more loyal and work harder than their American counterparts. Consequently, he decided to return to his homeland upon his graduation from college. He spent the next 18 months researching 40 different business options ranging from software development to hospital management. Using a matrix, Son ranked each one against 25 of his own“success measures.”He described a few of these to Webber in the Harvard Business Review interview:“I should fall in love with [the] business for the next 50 years at least,”“the business should be unique,”and“within 10 years I wanted to be number one in that particular business.”The field he chose—wholesaling personal computer (PC) software—met the majority of his criteria. At the time, most software developers did not have the capital to promote their products to hardware manufacturers, and most hardware manufacturers and retailers did not have software to run on their machines. Son hoped to carve out a profitable niche as a liaison between the two groups.

At first, his 1981-formed company, Japan Softbank, was more spectacle than substance. Using a combination of previously earned and borrowed funds, Son purchased one of the biggest display areas available at a 1981 consumer electronics show in Tokyo. Having absolutely no product to offer, Son called all 12 of the software vendors he knew at the time and offered to display their wares at his booth gratis. Not surprisingly, many jumped at the opportunity. Although his exhibit, which featured a large banner proclaiming a“revolution in software distribution,”caught many attendees’ attention, most already had their own contacts with software vendors. The show earned the fledgling entrepreneur only one contact; luckily, it was with Japan’s foremost PC retailer, Joshin Denki Co. Son negotiated exclusive rights to purchase software for the chain, then parlayed that top-notch industry connection into exclusive contracts with other firms, including Hudson Software, the country’s largest vendor. Over the course of its first year in business, Japan Softbank’s monthly sales mushroomed from US$10,000 to US$2.3 million. By 1983, the company served over 200 dealer outlets.

By that time, Son was already pursuing additional business interests in the broader field he called“computing infrastructure.”He first diversified into publishing in 1982. His first two magazine titles, Oh!PC and OhIMZ, lost hundreds of thousands of dollars in their inaugural months due to lack of interest. But Son feared that if he dropped these sidelines clients would smell trouble, so instead he revamped the layout and threw the weight of an expensive television advertising campaign behind the project. By the early 1990s, the flagship Oh/PC enjoyed a circulation of about 140,000 and had become the forerunner of a stable of 20 Softbank-published periodicals, including the Japanese edition of PC Magazine, launched in 1989. Writing for Forbes in 1992, Andrew Tanzer noted that“the magazines rather shamelessly promote products Son distributes,”an accepted practice in Japan. By the early 1990s, the division had also put out over 300 computing books and become Japan’s leading publisher of high-tech magazines.

A lengthy bout with hepatitis sidelined Son from 1983 through 1986. Although he gave up Japan Softbank’s presidency during this period, Son kept tabs on the company via computer and telecommunications equipment installed in his hospital room. His prolonged recuperation apparently gave him time to conjure up new ideas. Upon his return to Japan Softbank’s helm, Son invented a“least-cost routing device”that came to form the basis of the company’s DATANET telephone data division. The idea evolved when Japan’s telephone monopoly, Nippon Telegraph&Telephone Corp. (NTT), was joined by three new common carriers—DDI Corporation, Teleway Japan, and Japan Telecom—in 1986. Although they offered lower long-distance rates, the inconvenience of dialing the three newcomers’ additional four-digit prefixes deterred many customers from signing on. Son’s computerized invention, which he described as about“the size of two cigarette packs,”would automatically choose the cheapest carrier and route, then dial the appropriate number. Periodic online updates kept the routers’ rate information current. Japan Softbank offered the devices free to telephone customers and made money by collecting royalties on common carriers’ increased billings. In the early 1990s, Son expanded the business by offering routers installed in new telephones and fax machines.

Early 1990s: Venture Capitalist and Corporate Matchmaker

Son renamed his company Softbank Corp. in 1990. Seeking ways to invest his profits—and perhaps to erect a bulwark against getting bypassed in the distribution chain—Son soon earned renown as a venture capitalist and corporate“matchmaker.”Early deals paired U.S. software vendors with Japanese partners who modified American computer applications for sale in Japan. Softbank made commissions on the matchmaking, then distributed the newly modified products.

The“marriages”got bigger in the early 1990s. In 1991, Son arranged two major computer networking alliances that combined the resources of a coterie of well-known rivals. The lead company in the first venture was BusinessLand Inc., a top systems integrator in the United States. It owned 54 percent of the US$20 million venture, appropriately named BusinessLand Japan Co. Softbank held another 26 percent of the equity, while Toshiba Corp., Sony Corp., Canon Inc., and Fujitsu Ltd. each controlled 5 percent. Unlike its California-based majority partner, BusinessLand Japan eschewed the retail market in favor of corporate customers. While some analysts observed that the new venture’s Japanese participants would give it a leg up on pre-existing competitors such as America’s Electronic Data Systems (EDS), IBM Corp., and Digital Equipment Corp., others noted a conflict of interest in having computer manufacturers among BusinessLand Japan’s investors. In fact, the venture failed and was liquidated within a year.

Company Perspectives:

Vision: Softbank aims to leverage the power of the digital information revolution to make knowledge available to people no matter who or where they are and, by doing so, to foster the realization of a better life for all

Nonetheless, Son had no trouble convincing many of those same corporations to invest in a second endeavor that same year, Novell Japan Ltd., in which Novell took a 54 percent stake. Softbank held 26 percent of the new company, while hardware manufacturers NEC, Toshiba Corp., Fujitsu Ltd., Canon Inc., and Sony Corp. each chipped in four percent of the equity. Although each of the latter five partners produced its own version of the networking system, all were compatible. The coalition sold network operating systems, peripherals, cables, transceivers, boards, and other network-related products. Since, according to Son’s estimate, less than 5 percent of Japan’s PCs were networked in 1990, the allies expected to make Novell’s NetWare the industry standard there. Son predicted that the Japanese computer networking industry would“grow like hell”in a 1992 interview for the Harvard Business Review. This prediction came true: by 1994, Novell Japan Ltd. boasted US$130 million in annual sales.

That same year, Son engineered what Business Week called a“sweeping alliance”involving Cisco Systems Inc., Fujitsu Ltd., Toshiba Corp., and a dozen other Japanese firms. The partners anted up a total of US$40 million to fund the launch of Nihon Cisco System, which planned to distribute internetworking systems in Japan.

Although he was widely hailed as a“whiz kid,”Son was not infallible. Within just six months in 1991, he allegedly lost US$10 million in a bungled online shopping venture. Sys-tembank, a joint venture with Perot Systems, was intended to provide systems integration for large Japanese corporations. According to a February 1995 article in the New York Times, Systembank was“quietly disbanded.”In 1994, Son convinced NTT to invest US$200,000 in a“video on demand”alliance. The proposed interactive system would allow subscribers to request movies and other media at their leisure. Son boldly predicted that the joint venture would have ten million customers by the turn of the century. But NTT, which had a similar agreement with Microsoft Corporation, did not plan to have the necessary infrastructure (i.e., fiber optic cable to households) ready for another five to ten years, which pushed back Son’s anticipated timetable substantially.

Son’s first postgraduate American venture, Softbank Inc., was formed in 1993 with the cooperation of Merisel Inc. Phoenix Technologies Ltd., and telemarketer Alexander and Lord. The new subsidiary planned to distribute software through the interactive Softbank On-Hand Library service. Softbank Inc.’s vice-president, Meg Tuttle, described the demo disks as“adware.”Reviewer Steve Bass of PC World ”fell in love”with the US$10 CD-ROMs, which allowed users to“test-drive”over 100 programs, then order and pay for the selected software online. Several big-league computer companies, including Apple Computer, IBM, and Ingram Micro, had already launched similar promotions. But other analysts and competitors nixed the idea. For example, David Goldstein, president of Channel Marketing, told PC Week’s Lawrence Aradon that offering software on compact disks would become“the Edsel of the computer industry.”The venture’s direct competition with one of Softbank’s most important consumer groups, software retailers, broke what Steve Hamm of PC Week called one of Son’s golden rules:“don’t compete with clients or suppliers.”By early 1995, in fact, a number of industry analysts pronounced the venture defunct for that very reason.

Mid-1990s: Expanding into“Digital Information Infrastructure 99

Son took Softbank Corp. public in 1994 in an offering that valued the company at US$3 billion. The founder retained a 70 percent interest in his company. Coming off the late 1994 loss of a bidding war for the U.S. magazine publishing operations of Ziff Communications Co., Son acquired that firm’s trade show division for US$202 million. The subsidiary’s name was changed from ZD Expos to Softbank Expos. Early in 1995, Softbank made a major addition to that interest with the US$800 million purchase of a package of 17 computer trade shows from Sheldon Adelson’s Interface Group. The acquisition, which was financed with at least US$500 million in debt and a new offering of Softbank Corp. shares, nearly doubled Softbank’s U.S. operations.

The acquisition included the Las Vegas Comdex show, which was characterized in a 1995 Wall Street Journal article as“a huge draw in the computer industry.”Launched in 1979, Comdex attracted 195,000 attendees and 2,200 exhibitors to its November 1994 show. Although the event remained popular, its high prices had come under criticism. Some major exhibitors, including Compaq, Packard Bell, Oracle, and Seagate Technologies, had already opted out of the show by the time Softbank took over. Son expressed confidence that he could revitalize the event without a total revamp, citing the fact that exhibit space for the 1995 show was already 90 percent booked by the previous spring. Expansion plans for the new businesses included the first French Softbank Expo in 1995 and the premier Japanese and British Comdexes in 1996.

Key Dates:

1981:

Masayoshi Son founds Japan Softbank as a wholesaler of PC software.

1982:

Company diversifies into publishing.

1989:

Company launches the Japanese edition of PC Magazine.

1990:

Company is renamed Softbank Corp.

1994:

Softbank is taken public; the trade show division of Ziff Communications is acquired.

1995:

Company purchases 17 computer trade shows, including Comdex, from Interface Group.

1996:

Ziff-Davis Publishing Co. is acquired; Softbank gains a controlling stake in Yahoo! Inc., which goes public later in the year; an 80 percent stake in memory board maker Kingston Technology Company is acquired.

1999:

Softbank transforms itself into a holding company focusing on the Internet; stake in Kingston Technology is divested.

2000:

Ziff-Davis is sold off; ZD Events is spun off as Key3Media Group, with Softbank retaining a significant stake; ZDNet is sold to CNET Networks; the Nasdaq Japan Market, partially owned by Softbank, is launched; a Softbank-led consortium purchases Nippon Credit Bank, Ltd., which is renamed Aozora Bank Ltd.; Softbank’s stock plunges 90 percent as the Internet stock bubble bursts.

Son’s aggressive approach to acquisitions continued in 1996. In February Softbank was able to secure Ziff-Davis Publishing Co., which Son had failed to acquire in late 1994, through a US$1.8 billion purchase price, paid to Forstmann Little&Co. (the firm that had outbid it the first time around). Ziff-Davis was the leading publisher of computer and high-tech magazines in the United States and had a several-years-long relationship with Softbank involving licensing deals to publish Japanese versions of Ziff computer magazines, including PC Magazine.

Son’s expansion into trade shows and publishing was part of his aim to become the world’s leading provider of“digital information infrastructure.”Along these lines were two additional 1996 developments. In 1995 Softbank had already purchased a five percent stake in Yahoo! Inc., initially the provider of a directory for the Internet before evolving into the premier Internet portal. In April 1996 Softbank increased this stake to a controlling 37 percent, marking the firm’s first major investment in the Internet; later in 1996 Yahoo! was taken public. Son was aggressive not only with acquisitions but also in exploiting synergies between his burgeoning holdings. For example, the new Ziff-Davis magazine title Internet Life was recast as Yahoo! Internet Life; positioned as the ’ ’TV Guide of the Internet,”this title’s advertising rate base reached 200,000 by the end of 1996. Softbank and Yahoo! also set up a joint venture called Yahoo Japan Corporation, 60 percent owned by Softbank, which created a Japanese-language version of Yahoo! that quickly became the most visited web site in Japan. Consummated in September 1996 was the US$1.51 billion purchase of an 80 percent stake in Kingston Technology Company, a privately held maker of PC memory boards based in Fountain Valley, California. The acquisitions and investments in Softbank, Ziff-Davis, Yahoo!, and Kingston were part of a clear and rapid expansion outside of Japan, concentrating on the world’s key technology market, that of the United States. Yet another 1996 development, meanwhile, was centered on Japan as Softbank entered the field of digital satellite broadcasting through the establishment of Japan Sky Broadcasting Co., Ltd., a joint venture with Rupert Murdoch’s News Corporation Limited.

Softbank’s spectacular series of acquisitions resulted in the doubling of net sales from fiscal 1996 to fiscal 1997, from ¥171.1 billion (US$1.61 billion) to ¥359.74 billion (US$2.9 billion), and a 94 percent jump in pretax profits, from ¥15.98 billion (US$150.3 million) to ¥29.57 billion (US$238.3 million). At the same time, long-term debt used to fund the company’s expansion was ballooning, reaching ¥595.03 billion (US$4.79 billion) by the end of fiscal 1997. Concern about the debt load, coupled with slower sales growth and falling margins, as well as allegations of improprieties in the company’s financial disclosures (which were widely disseminated in a best-selling book in Japan called Inside Revelation: Softbank’s Warped Management, whose publisher, Yell Books, was sued by Softbank), sent Softbank’s stock plunging from ¥8,450 in early 1997—its peak for the year—to a low of ¥1,670 by November of that year. Another setback for Softbank in 1997 was a serious dilution of its initial 50 percent stake in Japan Sky Broadcasting when Sony Corporation and Fuji TV joined the venture followed by the merging of it with a competitor, Japan Digital Broadcasting Services. Softbank’s stake was reduced to 11.4 percent.

To raise some much needed cash, Son began seeking listings for some of his subsidiary companies. In November 1997 Yahoo Japan was taken public on the Japanese over-the-counter market, with Softbank keeping a 51 percent stake. Then in April 1998, 26 percent of stock in the renamed Ziff-Davis Inc. was sold through an IPO on the New York Stock Exchange, raising US$400 million. Prior to its listing, Ziff-Davis was given ownership of Softbank’s exhibits operations, which were initially called ZD Comdex and Forums Inc. but were soon renamed ZD Events Inc., as well as ZDNet, a web site featuring online versions of a number of Ziff-Davis publications. Meantime, Softbank’s stock began trading on the first section of the Tokyo Stock Exchange in January 1998.

Late 1990s and Beyond: Emphasizing the Internet

The late 1990s saw Softbank increase its investments in the Internet significantly, during what would eventually be viewed as the Internet stock bubble. By mid-1999, Softbank had significant stakes in Yahoo!, Yahoo Japan, ZDNet, community-oriented portal GeoCities, e-commerce“superstore”Buy-com Inc., consumer loan specialist E-Loan Inc., and online broker E*Trade Group Inc. Through joint ventures, Softbank had helped establish several more Japanese versions of successful American web sites, including E-Loan Japan, E*Trade Japan, GeoCities Japan, and Morningstar Japan, the latter a venture with Morningstar Inc. that set up a web site providing Japanese financial news and market analysis. Although not all of Son’s Internet investments were successful, he was able to ride the US$338 million he had invested in Yahoo! to spectacular heights. Yahoo!’s soaring stock price led Softbank’s investment to be worth more than US$10 billion by mid-1999. Overall, the US$2 billion that Son had invested in 100 Internet companies was worth more than US$17 billion by this time. In March 1999 Ziff-Davis created a tracking stock for ZDNet and sold 16 percent of the unit to the public through an IPO. In the topsyturvy world of the Internet stock bubble, by mid-1999 ZDNet had a market capitalization greater than that of Ziff-Davis, despite Ziff-Davis’s 84 percent stake in ZDNet.

In June 1999 Softbank Corp. transformed itself into a holding company focusing on the Internet. The finance-oriented Internet holdings, including E*Trade and Morningstar Japan, were combined within a new subsidiary called Softbank Finance Corporation. Softbank’s technology services related to e-commerce were bundled within Softbank Technology Corp., which was taken public in July 1999 on the Japanese OTC market. That same month, Softbank sold its stake in Kingston Technology back to the company’s founders for US$450 million, in a move to divest non-Internet assets. Also in July, Softbank began exploring strategic options related to Ziff-Davis, including the possible sale of the company in what would be a further concentration on the Internet. One month earlier, Softbank joined with the National Association of Securities Dealers (NASDAQ) to create a joint venture called NASDAQ Japan, Inc. to set up a Japanese version of the NASDAQ Stock Market. In June 2000 the NASDAQ Japan Market commenced operations with eight listed companies.

In early 2000 Softbank began selling off Ziff-Davis piecemeal, initially planning to retain ZDNet. In April 2000 the magazine unit was sold for US$780 million to a partnership headed by Willis Stein&Partners, L.P., emerging as Ziff Davis Media Inc. The ZD Events unit was spun off to shareholders as a new company called Key3Media Group, Inc., in which Softbank retained a sizeable stake. ZDNet would have then become a standalone, publicly traded company 45 percent owned by Softbank. But CNET Networks Inc., ZDNet’s archrival, stepped in with a takeover offer, which was accepted, resulting in a US$1.6 billion-in-stock acquisition later in 2000.

By February 1999, Son’s emphasis on the Internet had helped send his company’s share price soaring to ¥60,667 (US$592). At that point, Softbank’s market value was US$190 billion. By late November, the share price had plunged more than 90 percent to ¥5,970 (US$53.87). The company’s market value dropped by US$172 billion in just nine months, reaching US$17.9 billion. During this precipitous decline, Softbank was forced to abandon plans to sell shares in five of its main subsidiaries: Softbank E-Commerce Corp., Softbank Finance, Softbank Media&Marketing Corp., Softbank Broadmedia Corporation, and Softbank Networks Inc. Later in 2000, faced with continued stock market doldrums, Softbank put the brakes on joint ventures in Europe with News Corporation and Vivendi, both of which aimed at creating European versions of U.S. Internet companies. In September 2000, a Softbank-led consortium purchased Nippon Credit Bank, Ltd., which had collapsed in late 1998, from the Japanese government for US$932 million. Softbank held a 49 percent stake in the bank, which was renamed Aozora Bank Ltd., as Softbank became the first nonfinancial company to enter the Japanese banking sector. Both Nasdaq Japan and Aozora Bank were viewed by Son as underpinnings of a new financial infrastructure in Japan that might foster the development of the Internet-centered economy—and in turn, Softbank—by remedying the chronic shortage of capital faced by the nation’s venture firms.

It was clear that Son remained one of the most innovative businesspeople in Japan, if not the world. The severe decline in his company’s stock price during 2000, however, left the future rather clouded. Investors found Softbank’s vast array of holdings in more than 600 companies, most of which were not publicly traded, confusing. The technology bear market made further IPOs problematic. Without question there were valuable holdings in the Softbank portfolio, most notably Yahoo! and Yahoo Japan (the latter’s stock had risen 6,000 percent from its IPO in November 1997 to late 2000). Son also believed that the downturn in Internet stocks actually presented him with opportunities to make additional investments at bargain-basement prices.

Principal Subsidiaries

Softbank E-Commerce Corp.; Softbank Finance Corporation; Softbank Media&Marketing Corp.; Softbank Broadmedia Corporation; Softbank Networks Inc.; Softbank Technology Corp. (63%); Yahoo Japan Corporation (51.2%); NASDAQ Japan, Inc. (43%); Aozora Bank Ltd. (49%); Softbank Inc. (U.S.A.); Softbank Venture Capital (U.S.A.); Softbank International Ventures (U.S.A.); Softbank Korea Co., Ltd.; Softbank China Holdings Pte. Ltd.

Principal Competitors

Accel Partners; CMGI, Inc.; Flatiron Partners; Fujitsu Limited; idealab!; Internet Capital Group, Inc.; Kleiner Perkins Caufield&Byers; Safeguard Scientifics, Inc.; Sequoia Capital; Trinity Ventures; Vulcan Northwest Inc.

Further Reading

“After the Party,” Economist, May 18, 1996, p. 65.

Aragon, Lawrence, “Off and Running,” PC Week, March 14, 1994, p. Al.

Bass, Steve, “Hot Picks for the Home Office,” PC World, March 1995, p. 241.

“The Best Entrepreneurs,” Business Week, January 9, 1995, p. 112.

Bickers, Charles, “Japan’s Mr. Internet: Softbank’s Bold Moves Cause Ripples in Japan Inc.,” Far Eastern Economic Review, July 29, 1999, pp. 11-12.

Bremner, Brian, “Is Softbank Sinking? Don’t Bet on It,” Business Week, April 24, 2000, p. 144.

——,“Why Softbank Is Shouting ’Yahoo!,’“Business Week, September 7, 1998, p. 48.

Bremner, Brian, and Amy Cortese, “Cyber-Mogul: to Conquer the Net, Masayoshi Son Takes to the High Wire,” Business Week, August 12, 1996, pp. 56-62.

Bremner, Brian, and Linda Himelstein, “Softbank’s Cyber Keiretsu,” Business Week, April 5, 1999, p. 24.

Bulkeley, William M., Jim Carlton, and Norihiko Shirouzu, “Japanese Firm to Buy Comdex Computer Show,” Wall Street Journal, February 14, 1995, p. A3.

Burke, Steven, “$20 Million Joint Venture Gives BusinessLand Foothold in Japan,” PC Week, June 11, 1990, p. 119.

Butler, Steven, “Empire of the Son: The Bill Gates of Japan Controls a Huge Chunk of the Internet,” U.S. News and World Report, July 5,1999, pp. 48, 50.

Desmond, Edward W.,“Japan’s Top Technology Investor Takes a Hit,” Fortune, September 8, 1997, pp. 150-52.

Gilley, Bruce, Chester Dawson, and Dan Biers, “Internet Warrior on the Defensive,” Far Eastern Economic Review, November 16, 2000, pp. 54 +.

Hamilton, David P.,“Comdex Owner Doesn’t Plan to Alter Show,” Wall Street Journal, February 21, 1995, p. A13B.

Hamilton, David P., and Norihiko Shirouzu, “Softbank to Buy Memory Board Maker,” Wall Street Journal, August 16, 1996, p. A3.

Hamm, Steve, “The Rising Son,” PC Week, April 10, 1995, p. Al.“Heat Turns Up on the Rising Son,” Financial Times, November 13,1997, p. 39.

Holyoke, Larry, “Japan’s Hottest Entrepreneur Hits the U.S.,” Business Week, February 27, 1995, p. 118G

Ip, Greg, and Bill Spindle, “NASDAQ Plans to Set Up a New Stock Market in Japan: Softbank to Invest in Proposed Project,” Wall Street Journal, June 16, 1999, p. A19.

Landers, Peter, “Prodigal Son: For ’Japan’s Bill Gates,’ Last Year Was Daunting. Can Masayoshi Son Come Back?,” Far Eastern Economic Review, January 22, 1998, pp. 42 + .

Lipin, Steven, “Persistence Pays Off in Second Sale of Ziff-Davis,”

Wall Street Journal, December 29, 1995, p. CI.

——,“Ziff-Davis Unit of Forstmann Set to Be Sold,” Wall Street

Journal, November 9, 1995, p. A3.

McCartney, Laton, “The Rising Son,” Upside, April 1997, pp. 108-110.

Moffett, Sebastian, “The Entrepreneur: Softbank’s Masayoshi Son Builds an Unconventional Empire,” Far Eastern Economic Review, November 7, 1996, p. 206.

——,“A Whole New Ballgame,” Far Eastern Economic Review, July 4, 1996, p. 70. Ono, Kazuyuki, “Fortunate Son: A One-of-a-Kind Success Story,” Tokyo Business Today, October 1995, pp. 26 + .

Patch, Kimberly, “’Virtual Shopping’ Via CD-ROM,” PC Week, July 12, 1993, p. 6.

Pollack, Andrew, “A Japanese Gambler Hits the Jackpot with Softbank,” New York Times, February 19, 1995, sec. 3, p. 10.

Shirouzu, Norihiko, and David P. Hamilton, “Softbank’s Buying Spree May Be Hard Act to Follow,” Wall Street Journal, August 19, 1996, p. B4.

Smith, Dawn, “Demo Disk Double-Take,” Marketing Computers, October 1993, pp. 18-19.

Spindle, Bill, “Japan’s Softbank Hits Some Rough Road,” Wall Street Journal, October 17, 1997, p. A16.

Strom, Stephanie, “Its Own Stock Battered, Softbank Abandons Spinoff Plan,” New York Times, August 2, 2000, p. C4.

Sugawara, Sandra, “Masayoshi Son Was Among the First to Flout Japan’s Business Establishment,” Washington Post, May 9, 1999, p. HI.

Tanzer, Andrew, “Hot Hands,” Forbes, May 11, 1992, p. 182.

Umezawa, Masakuni, “The New Golden Age of Wireless,” Tokyo Business Today, November 1994, pp. 10-12.

Webber, Alan M.,“Japanese-Style Entrepreneurship: An Interview with Softbank’s CEO, Masayoshi Son,” Harvard Business Review, January-February 1992, pp. 93-103.

Weinberg, Neil, “Overreaction,” Forbes, February 9, 1998, pp. 47-48.

Weinberg, Neil, and Amy Feldman, “Bubble, Bubble …,” Forbes, March 11, 1996, p. 42.

—April D. Gasbarre

—updated by David E. Salamie