Across the Pacific, another 'Yahoo' survives

posted Jan 11, 2017, 6:59 AM by Barny CK   [ updated Jan 11, 2017, 5:01 PM ]

With Marrisa Mayer stepping down from Yahoo's board of directors and Yahoo filing with the Securities and Exchange Commission to be renamed Altaba Inc., Yahoo is inching closer to its demise, closing yet another chapter in the history of the internet where big names such as Yahoo and AOL dominated the scene. However, where web portal is concerned, another 'Yahoo' thrives.

Formed in 1996, Yahoo! Japan strangely flourishes for all the reasons its parent conglomerate faltered. Take a look at their homepage and one will immediately notice just how clustered it is. This runs counterintuitive to how Google operates; a clean sheet at load up. I mention Google because it is this feature which helped them dethrone Yahoo as the de facto search engine worldwide. That and its search technology is much more powerful.

Yahoo! Japan was a joint venture between Yahoo and Japanese telco Softbank to become Japan's first web portal. It went live on April 1, 1996. In November 1997, the company was listed on JASDAQ, subsequently traded at more than ¥100 million per share in the year 2000. In October 2003, Yahoo! Japan was listed on the Tokyo Stock Exchange.

Beyond the brand name Yahoo!, the company, being majority owned by Softbank, was pretty much free to choose how it wants to develop and what services it wants to provide. Other than the usual such as Yahoo News, Yahoo Weather and Yahoo Sports, it also started Yahoo Auction in 1999. Much like Ebay, that service have been one of Yahoo! Japan top earner, generating revenue by as much as ¥311 billion. Then there's also GYAO!, the company's online on demand video streaming service.

After 11 years, Yahoo! Japan is still a strong and financially sound company, posting year on year revenue growth. In fact, it has managed to retain its position as one of the leading web portals in Japan. Fundamentally, this is attributed to pioneer advantage. Yahoo! Japan has been in this business for as long as the internet has been around to the masses to the point that it is synonymous with the World Wide Web for as far as the Japanese are concerned. This and coupled by the fact that Japanese are generally brand-loyal indicates that Yahoo! Japan has a very firm grip on the Japanese internet market.  

While Yahoo back in the United States couldn't really figure out whether it was a technology company or a media company, Yahoo! Japan was pretty clear it's only a media company and not a technology company by using Google's search engine with minor tweaking in its searches to cater to the local taste. Yahoo News on the other hand collaborates with 300 external partners to churn out around 4000 articles a day. In February 2013, the company partnered with MediaMind to use its ad serving technology for rich media ads on its video streaming site GyaO!

The advent of smartphones also positioned Yahoo! Japan strategically to go mobile in ways other web portals could not easily do. This is because Softbank which owns the company pushes the site to be the default home page of web browser on all the mobile phones it sells. This further entrench the Yahoo brand power in the mindset of Japanese consumers as the go-to web portal in mobile internet. In some ways, it looks as though Yahoo! Japan was formed to eventually supplement Softbank's business, where Softbank provides the hardware and Yahoo provides the content.

Yahoo as the internet giant once upon a time may be coming to its end but at least across the pacific, another Yahoo lives on. That this Yahoo is still flourishing gives comfort, I guess, that we may continue to see it online in the coming years. Chances are this regional powerhouse will continue to dominate the local scene but also chances are it won't survive outside of Japan because it is serving such a niche market. Fundamentally, it is only taking advantage of the brand name without the burden and pressure of the founding company.