Softbank‘s Z Holdings Corp has revealed that it agreed to buy Yahoo Japan trademark and tech infrastructure for $1.61B (about 178.5 yen). The deal with Verizon Communications Inc was announced on Monday.
Despite crippling competition elsewhere, Yahoo is still a central fixture in SoftBank’s domestic internet business with services such as a web portal which currently has the highest traffic for a news site in the country, shopping and weather. Succumbing to competition from rival internet businesses, Verizon is transferring its businesses like Yahoo and AOL to Apollo Global in a deal worth $5B to be completed by the end of the year.
Repackaged as Z Holdings, Yahoo Japan is hoping to propel growth in Japan and the Southeast Asia region using payments and chat apps PayPay and Line.
Softbank and Naver, the company behind the Line chat app entered an agreement in 2019 hoping to stave off competition from rivals in the US and China.
In its announcement, SoftBank said “in the Internet market, overseas companies, especially those based in the United States and China, are overwhelmingly dominant, and even when comparing the size of operations, there is currently a big difference between such overseas companies and those in other Asian countries, other than China.
In the current agreement, Yahoo Japan receives royalties to compensate for the use of its trademark and technology. Under the new deal, the payment of royalties will cease after the payment of the $1.61B.
The deal was one of the last notes to be tied up in the $5B Apollo purchase of Verizon Media. The enormous figure will go a long way in helping Verizon deal with debt incurred in recent months, most notable, the $52.9B spent to purchase C-band spectrum.
In a press statement from Z Holdings, the company said that “although the Yahoo Japan License Agreement will be terminated, Yahoo Japan and Verizon Media will retain their cooperative business and technology relationship. Yahoo Japan will continue to deliver more convenient and innovative services under the ‘Yahoo! JAPAN’ brand, based on its mission statement: ‘UPDATE JAPAN.’”