Softbank's Losses Grow Despite Sales Growth - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Softbank's Losses Grow Despite Sales Growth

The Internet company lost $852 million, about 12% more than the year-ago quarter,

TOKYO (AP) -- Softbank Corp., which invests in a variety of electronic commerce, publishing, and technology service businesses, reported a wider loss for the latest fiscal year on a slight rise in sales.

The Internet company lost 99.99 billion yen ($852 million) in the year ended March 31, versus a loss of 88.8 billion yen a year earlier, the Tokyo-based company said Friday. Sales inched up 0.5 percent to 406.9 billion yen ($3.5 billion) from 405 billion yen.

Softbank president Masayoshi Son said the results weren't as bad as they looked as his business outside broadband had become profitable and the worst of the investment losses he had been forced to take after the burst of the dot-com bubble were over.

Among other things, Softbank co-owns Yahoo! Japan with Yahoo! of the United States. Its broadband service offers high-speed voice transmissions over Internet phone and wireless local area network links. A cable- TV service is set to start this year.

The service called "Yahoo! Broadband" controls the top market share in this nation with 2.55 million Internet users.

But Softbank is up against powerful competition, including former government monopoly Nippon Telegraph and Telephone Corp. Rivals are starting even faster Net-connecting services using optical fiber links.

Softbank has been selling parts of its stakes in companies such as Yahoo! Japan and Yahoo! of the United States to raise cash for broadband and booked an extraordinary gain of 134 billion yen ($1.1 billion) in fiscal 2002 for such sales.

It is also selling its stake in Aozora Bank of Japan to the U.S. investment fund Cerberus although that is awaiting approval from government authorities.

Its latest results included a charge of 96 billion yen ($818 million) on investment losses but that was an improvement from a charge of 178 billion yen in fiscal 2001.

Son refused to give forecasts for this year and would not say when his broadband business was going to turn profitable. He said he is hoping to attract 4 million users by March 2004.

Although the "backbone" investments for broadband are completed, money is still being spent luring users with free trial services and other campaigns, costing about 35,000 yen ($300) per person, Son said.

But revenue is gradually growing, now averaging 4,000 yen ($34) a person a month, he said.

If the business stopped trying to grow, it can easily turn a profit of 40 billion yen ($341 million) at 3 million users, said Son, who founded Softbank in 1981.

Broadband holds great potential in Japan possibly reaching 30 million users, he told reporters.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
10 Top Cloud Computing Startups
Cynthia Harvey, Freelance Journalist, InformationWeek,  8/3/2020
Adding Fuel to the MSP vs. In-house IT Debate
Andrew Froehlich, President & Lead Network Architect, West Gate Networks,  8/6/2020
How Enterprises Can Adopt Video Game Cloud Strategy
Joao-Pierre S. Ruth, Senior Writer,  7/28/2020
White Papers
Register for InformationWeek Newsletters
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
Current Issue
Enterprise Automation: Do More with Less
In this IT Trend Report, we highlight the benefits of automation and the various tools as enterprises navigate turbulent times, try to do more with less, keep their operations running, and stay on track with digital modernizations.
Flash Poll