Size Worth approximately $18BB 300 companies and affiliates
Makeup Financing value chain –Hotbank –Softbank Capital Partners $1.25 billion later-stage fund. –Softbank Venture Capital (SBVC) $2 billion under our management US Venture Managers –Rieschel on the West Coast –Charley Lax in Boston
Recent News Cisco invests $1BB in a Softbank fund Cisco to purchase back Japanese subsidiary Raising $4BB+ for broadband buildout –Fighting the entrenched NTT
Leadership Masayoshi Son, CEO (43) –Son’s share of Softbank is worth apx. $7 billion –charismatic, visionary –born in Japan, of Korean ancestry –immigrated to the SF as a teenager –University of California at Berkeley –made his first million inventing a multilingual pocket dictionary and translator Sold to Japan's Sharp Corp –named Forbes Businessman of the Year in 2000
Dawn of Son Son Founded the Softbank Corp in 1981 in Japan Established product-distribution channels for PC and game software –JV with Novell, Cisco Systems, and Microsoft Late 80s/early 90s, entered many new IS markets –publishing, network services & information delivery Went public in 1994 –Son retaining > 50 percent of the equity
Son Rises Made many “strategic” acquisitions –Ziff-Davis' worldwide exposition business –Comdex –Ziff-Davis Publishing Co. itself –2% cost of capital from Japanese Banks –arbitraging the higher P/E rates of Japanese companies Early Venture Investing –MediaBank Corp. - 1994 JV with NTT video on demand and Internet services in Japan –Early investor in Yahoo! –CyberCash & E*Trade Group Inc.
Strengths Focused on Internet content and services Ignored hardware and never challenged the big 3 –Microsoft, Intel, Cisco Lower-risk porting of US-style business models to other markets
Issues Value fell 90% Between 2/00 and 12/00 49% stake in Nippon Credit Bank –one of Japan's “most corrupt & badly managed banks” –risky assets of $35 billion –Mitigant: Government backing Launched Nasdaq Japan during tech-stock slump Japanese broadband access initiative is weak A few years ago Softbank in financial distress –threats of delisting, loan calls, accounting irregularities Poor investments –Kingston Technology, Ziff-Davis, 3-D chat, etc.
Emerging Market Strategy Telecom infrastructure in emerging markets Partnering with the World Bank –strong government relationships Leveraging their Netbatsu’s conglomerate power –Immaturity of their capital markets –importance of politics/regulation Partnering with Murdoch’s News Corporation in the UK, Australia, New Zealand and India
Conclusion Working hard to open Japan's ossified capital markets to a new generation of entrepreneurs They entrepreneurs may transform the Japanese economy Even if Softbank fails, the genie has been unleashed
Haikus Softbank is new way A stone thrown into a still pond Soon Nippon reshapes. New kid on the block Old boys are nervous and scared Information Rules.