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Shift to mobile services to up ad growth: Yahoo Japan

by Naoko Fujimura and Takashi Amano

Bloomberg

Yahoo Japan Corp. expects economic growth and a consumer shift to mobile services to spur revenue gains as it targets advertising growth of at least 10 percent.

“We expect to continue the growth pace a while,” Chief Financial Officer Toshiki Ohya said Tuesday in Tokyo.

Ads, which account for more than half Yahoo Japan’s sales, rose 15 percent to ¥190.5 billion in the year that ended in March.

The operator of the country’s most-visited Web portal, 42 percent owned by billionaire Masayoshi Son’s Softbank Corp., is targeting a 77 percent increase in earnings within six years by expanding in e-commerce and offering more services for smartphones and tablet computers.

Prime Minister Shinzo Abe’s strategy to end deflation, nicknamed “Abenomics,” may stoke earnings for the web portal as advertisers boost their spending to tap economic growth.

“We expect advertising to lead us in the next two to three years, while it may take a while to double our e-commerce business,” Ohya, 43, said, adding the company needs to add more products and improve e-commerce services to compete against Amazon.com Inc. and Rakuten Inc.

Yahoo Japan rose 1.3 percent to ¥48,000 in Tokyo trading Thursday morning, extending this year’s gain to 72 percent. That is more than double the 29 percent rise in the benchmark Topix index. The company is 35 percent owned by Yahoo! Inc., the Sunnyvale, California-based operator of the U.S. portal.

The shift in consumer use of smartphones and tablets will see the use of mobile devices to access Yahoo Japan’s services overtake that of personal computers within two years, Ohya predicted.

The firm said it almost tripled advertising sales from smartphones to ¥8.5 billion in the three months that ended March 31 from ¥3 billion a year earlier. The economy grew an annualized 4.1 percent in the first quarter, the Cabinet Office said June 10.

Yahoo Japan has been adding customers who pay ¥399 a month for services such as access to books and coupons, helped by SoftBank promotions to new customers at its outlets. Yahoo Japan said it had 9.19 million subscribers as of March 31.

Net income jumped 14 percent to ¥115 billion in the 12 months through March, the fastest annual growth in four years, the firm reported in April. After posting 16 straight years of profit growth, Yahoo Japan forecast net income to rise 9 percent to ¥56.9 billion in the first half of the current financial year on a 15 percent jump in sales to ¥180 billion.