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With shopping spree, SoftBank hopes to lay more golden eggs

Tim Hornyak | Dec. 8, 2014
Masayoshi Son, the maverick head of Japanese mobile giant SoftBank, has sunk millions into a taxi app and floating wind turbines, all in one week. It was nothing unusual, though.

Masayoshi Son, the maverick head of Japanese mobile giant SoftBank, has sunk millions into a taxi app and floating wind turbines, all in one week. It was nothing unusual, though.

Indeed, over the past six weeks, the parent company of U.S. carrier Sprint has invested nearly US$1 billion in companies outside Japan. The bulk of the cash went to Snapdeal, India's largest online marketplace, part of Son's goal of plowing $10 billion into the subcontinent over the next 10 years.

On Friday, SoftBank announced it had taken a much smaller stake, $7 million, in Altaeros Energies, an MIT spinoff founded in 2010 that designs airborne wind turbines. The kite-like devices stay aloft at about 2,000 feet and generate more than twice the electricity of similarly sized tower-mounted turbines closer to the ground. They could also lift other equipment into the skies, for instance providing telecommunications coverage to unconnected regions.

The deal highlights SoftBank's aggressive overseas expansion strategy, which has positioned it to move into the lives of more and more people around the world. As consumer-oriented Japanese brands continue to retreat from the limelight, SoftBank could become the Internet equivalent of what Sony once was for electronics.

SoftBank spokesman Matthew Nicholson said the Altaeros investment opened up opportunities. "We believe that their Buoyant Airborne Technology (BAT) is a promising renewable energy solution that could be used at remote islands and locations in Japan and the wider Asia-Pacific region," he said in an email. "When combined with communication and surveillance technologies, it could also lead to new business opportunities for SoftBank."

That kind of Google-style moonshot play, while small, is very unusual for a Japanese telecom company -- but not unexpected from Son. The upstart innovator introduced the iPhone into Japan in 2008, shaking up the local smartphone market and proving rivals NTT DoCoMo and KDDI wrong about the smartphone's appeal. Apple's iOS now accounts for a 48 percent market share in Japan, according to Kantar Worldpanel.

The company has seen its greatest successes in Internet gambles, from Yahoo Japan in 1996 to Alibaba in 2000, which massively paid off this year. Softbank recently invested in Tokopedia, an Indonesian online marketplace that it sees as representative of the growth potential in Asian online businesses.

Even though SoftBank could count 756 subsidiaries as of March 2014, Son seems to have lost little of his appetite for risk. In one of its more provocative ventures, next year SoftBank is planning to sell a potentially groundbreaking domestic communications robot, Pepper, for only about the price of a high-end PC. Developed by SoftBank's French robot unit Aldebaran Robotics, the droid has been working as a retail assistant for the past few months, helping launch the iPhone 6 in Japan and hawking coffee machines for Nestle Japan, which plans to field 1,000 Peppers across the country.

 

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