Here is why I think Google’s Strategy In Japan: Avoid Yahoo And Take Over The Mobile Web First will fail.
You can see from the Engadget pages about Softbank pages where they show a close up from the mobile phones where the key is located. Softbank being an investor in Yahoo! Japan has a huge leverage and I don’t think that being inside the operator/carrier menu will bring market share to Google.
Being a physical key in your phone is an advantage that can’t be dismissed because not everyone knows how to access every function of their mobile phone.
Eurotechnology.com sent an email detailing some information about the japanese operation that Yahoo! has. Yahoo! Japan has 100% profit margins. I always know that their operation in Japan was generating profit but never thought it was generating profit in this scale. Too bad (or good) this is not part of the deal.
Here is part of the email Eurotechnology sent to their subscribers:
Microsoft has offered US$ 44.6 Billion to acquire all outstanding shares of YAHOO Inc. Interestingly, Microsoft would actually only get about 72% of all of YAHOO for this money: all of YAHOO Inc + 33% of YAHOO-Japan. The remaining 67% of YAHOO-Japan (=28% of global YAHOO) will remain with current share holders and will remain traded on the Tokyo Stock Exchange for the time being.
YAHOO-Japan is far more successful than YAHOO Inc. Assuming the same 62% Premium, Microsoft would be offering an additional US$ 28 Billion for the remaining 67% of YAHOO-Japan.
YAHOO-Japan is in much better shape than YAHOO Inc.: YAHOO Japan’s profit margin is close to 100%, while global YAHOO Inc’s profit margin is about 18%.