Yahoo! Broadband Japan, Experiences

Ian Fogg | October 31, 2003, 06:49 PM

Interesting information in the Yahoo Japan financials. While not part of my coverage area (Europe), it's pertinent given the UK BT Yahoo! Broadband launch, and the potential for further Yahoo/Broadband Provider partnerships elsewhere in Europe.

In the full year report (to end March 2003):
- 2.3m broadband subs up from 490k a year earlier

Revenue share agreement with Softbank, new incentive agreement April 2002:
- Lump-sum incentive fees: circa Y11,000/€86 per application (80 percent at application, remainder after six months)
- Bonus incentive fees (in addition to the lump-sum fees) incentive fee per 100,000 lines (figure undisclosed)
- Continual incentive fees, approx Y150/€1.17 per month per continued use

Softbank Responsibilities:
- Providing ADSL service between users and phone offices, installing network infrastructure between phone-office
buildings, and providing connections to Internet networks
- Handling user inquiries and providing technical support

Yahoo! Responsibilities:
- Promoting Yahoo! BB services
- Recruiting users of Yahoo! BB services (and I have a Yahoo! Broadband bag picked up in Akihabura, Tokyo in July to prove it!)
- Operating the Yahoo! BB portal site
- Providing mail and Web site services
- Providing a fee-collection platform

In the most recent interims, the proportion of Yahoo! Japan net sales / income, split by division is:
Auction 27.6% / 40%
Listing 17.4% / 23.4%
Yahoo! BB 17.8% / 19.8%
Shopping 8.8% / 2%
Media 8.1% / 3.7%

Given the high speeds available (8M, 12M and 26M) and Japan's leadership in many areas of technology adoption, these figures demonstrate the importance to Yahoo! Japan of these broadband revenues, and the background experience for the SBC and BT services.