Yahoo Japan on Amazon and Rakuten on a $ 3.7 billion deal

Formerly cousin of the US Yahoo website, Yahoo Japan is now a separate company under the control of SoftBank and increasingly focused on commerce rather than its core business of selling advertising against content such as news and sports.

This transfer will accelerate with Yahoo Japan's $ 3.7 billion plan to acquire a 50.1% stake in the Japanese online fashion retailer

Zozo
Inc.

3092 -1.22%

Zozo's founder, Yusaku Maezawa, who sells the bulk of his 36.8% stake and resigned as CEO on Thursday, said he wanted to leave the company that he had built and focused on his personal ambitions, including traveling in space, twice.

Thanks to Zozo in its stable, Yahoo Japan hopes to attract younger consumers sensitized to fashion, in competition with Amazon, whose sales in Japan reached $ 13.8 billion last year, and his local rival.

Rakuten
Inc.

"Our goal is to become the number 1 in domestic sales volume" about five years ago, said Yahoo Japan's managing director.

Kentaro Kawabe

at a press conference. "Some say that Rakuten and Amazon are too strong, but with this capital alliance with Zozo, we are on the cusp of achieving that goal."

Mr. Maezawa recently decided that at age 43, his life was at a turning point. Mr. Maezawa signed up last year to fly around the moon with

Elon Musk

The SpaceX vehicle in 2023, and he revealed at the press conference that he was planning an extra trip to the moon. He did not give details but said he would use some of his newly available leisure time to study Russian.

In a surprise appearance, the founder and CEO of SoftBank,

Masayoshi son,

took the stage in a Zozo brand T-shirt that corresponds to Mr. Maezawa. Mr. Son said that he had been approached by Mr. Maezawa and asked him how he could start his second life.

Mr. Son had the merit of instigating Mr. Maezawa to start talking to Yahoo Japan about a sale, but Mr. Maezawa went on to say that his friend had erred because the two parties had already discussed cooperation.

Compared to general stores such as Amazon, Zozotown, created in 2004, is a more popular fashion platform for trend-conscious consumers. Most of her clients are women who are usually between 20 and 30 years old.

"In order for Zozo to grow further, Zozo needed to reach more customers, not just fashion lovers. Yahoo faces challenges in the fields of fashion and young consumers, "said Maezawa. "It's an alliance like a marriage" in which each company can fill each other's weaknesses, he said, while recognizing that as a single person with a well-written social life, he might not to be an expert on marriage.

Keiichi Yoneshima, an analyst at Credit Suisse, said the deal would help both companies become more efficient in the areas of logistics, payments and advertising. Yahoo Japan stock closed up 2.3%.

According to the Ministry of Economy, Trade and Industry, the total Japanese e-commerce market reached nearly 18 trillion yen (201 billion USD) in 2018, more than double in eight years.

Yahoo Japan was born in 1996 from the joint venture SoftBank and then Yahoo Corp. the United States. A fund called Altaba Inc. inherited from Yahoo Corp. in Yahoo Japan when the US site was sold to

Verizon Communications
Inc.

and last year, Altaba finalized the sale of its total stake in Yahoo Japan.

The US site Yahoo is struggling to keep users face the rise of social media sites. Yahoo Japan, while facing similar challenges, remains Japan's leading information portal. A Reuters survey on consumer spending patterns this year found that 51 percent of Japanese respondents had used Yahoo Japan last week, easily beating other news sites.

This fall, Yahoo Japan plans to create an upscale online shopping mall in which only stores that meet the strict requirements of the company can open a store. The website calls itself "PayPay Mall", the name of a smartphone payment company run jointly by Yahoo and SoftBank.

"We will continue to look for an opportunity to buy an e-commerce business where there are companies as brilliant as Zozo," said Mr. Kawabe, CEO of Yahoo Japan.

Write to Megumi Fujikawa at [email protected]