Sony Corp. will invest over 1 billion yen in computer software developer JustSystem Corp. to jointly develop products that will link personal computers with digital audiovisual devices, the two companies announced Monday.
In a hastily arranged news conference, the two companies announced an agreement for Sony’s capital participation in JustSystem and technological cooperation for developing new digital products.
Under the agreement, JustSystem will issue 2 million new shares, worth 1.274 billion yen, and allocate all of them to Sony in July. As a result, Sony will have a 6.5 percent stake in JustSystem. However, Sony said it currently has no plan to send executives to JustSystem.
JustSystem started business in 1981 as a venture company and established a foothold with the popular Japanese-language, word-processing software “Ichitaro.” Recently, however, JustSystem has been suffering from declining sales due to intensifying competition from other software giants, especially Microsoft Corp. of the United States.
Although the two firms denied the deal is aimed at saving JustSystem, Sony appears to be coming to the rescue in light of the ailing software firm’s desperate lack of funds for product development and expansion. “We brought the deal to Sony. To establish a strong relationship between the two companies, we thought Sony’s capital participation in our company was indispensable,” said Kazunori Ukigawa, president of JustSystem.
Sony said it hopes to use JustSystem’s engineering resources to develop software and incorporate it with new products in a concept dubbed Digital Home Network. JustSystem plans to allocate the funds raised with the new share issue to research and development.
Ukigawa said the cooperative agreement will not immediately generate profits for JustSystem. “But in the long run, entering this business is what we needed to do now,” he said.
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