Yahoo Japan has dropped a planned acquisition of telco eAccess from Softbank that was due to be worth $3.2 billion (324 billion yen) to the Japanese wireless provider.
Back in March, when the acquisition plan was announced, Yahoo Japan said the purchase of eAccess was aimed at expanding the services it offers for smartphones and tablets.
The company’s web portal still pulls in considerable traffic in Japan but it is facing a fresh challenge for users’ eyeballs from a wave of mobile content aggregator startups. The strategy to counter that was going to be a Yahoo-branded mobile network called Y! Mobile. But not any more.
The company has evidently decided it doesn’t need to own a telco in order to offer network services to better compete with mobile upstarts. Today it said it would be offering Internet services via the eAccess network but would not be going ahead with the acquisition.
As Reuters notes, the logic of the takeover of a telco already owned by Softbank, a member of the same group as Yahoo Japan, had been queried by analysts — and its share price had taken a battering after the announcement. Yahoo Japan is 42.6% owned by Softbank.
Softbank’s need to raise addition funds to fuel its overseas acquisition ambitions is likely to be given a boost by Alibaba’s IPO – since the telco owns a circa 34% stake in the Chinese ecommerce giant — making the $3.2 billion Softbank was due to get from the sale of eAccess less of an incentive to go ahead with the deal.