In Person: Softbank leader a fan of big deals
Masayoshi Son’s blockbuster bid to control Sprint Nextel caps a career of innovation and business gambles
The Associated Press
Previous In Person profiles
TOKYO — The Japanese billionaire behind a deal that will create the world’s third-biggest mobile company spent his childhood in a slum, where he proudly rode in a stinking wheelbarrow filled with pig feed, pushed by his grandmother, a Korean immigrant.
The unlikely success story of Softbank President Masayoshi Son has taken another leap with his latest megadeal, announced last week, to take a 70 percent stake in U.S. mobile phone carrier Sprint Nextel for $20 billion.
The biggest foreign acquisition in the history of Japan Inc. underlines Son’s unusual status in a corporate culture that has long favored stability over risk-taking. Yet big deals are not the only reason Son has stood out.
He studied in the U.S., graduating from the University of California, Berkeley, and boasts American friends in high places, among them Microsoft’s Bill Gates. He was also close to Apple’s late founder Steve Jobs. But his high-profile acknowledgment of his Korean roots may be what most sets Son apart in Japan, which has a history of discrimination against its Asian neighbor.
Although initially met with some skepticism from credit-rating agencies, Son’s foray into the U.S. may serve as inspiration for similar moves by other Japanese companies as the strength of the yen makes overseas deals more affordable.
Son, Japan’s second richest man with a fortune of $7.2 billion, according to Forbes, said he identified with the entrepreneurial spirit of older Japanese pioneers such as Soichiro Honda, who started the automaker that carries his name, and Sony co-founders Akio Morita and Masaru Ibuka.
While at Berkeley, Son invented a pocket translator that was later bought for $1 million by Japanese electronics maker Sharp. He returned to Japan and used the money to start Softbank in 1981. In its early days, Softbank sold computer software and then branched into publishing. Since then it has grown into an empire of Web and mobile businesses.
Son acknowledged he had grown conservative over the past two years as Softbank paid back debt from earlier acquisitions. He decided he was ready to take new risks.
“Taking up a challenge always entails a big risk,” Son, 55, said at a joint news conference last Monday with Sprint’s Chief Executive Dan Hesse.
Son started making headlines in the 1990s with his aggressive acquisitions of companies, which eventually included the Japan units of Yahoo and Vodafone. He became a household name by pushing broadband services more than a decade ago, when the Internet was still relatively new in Japan. He then shifted his focus to the mobile Internet.
Son has always stuck out in a nation of “salaryman presidents,” where decision-making is customarily done by a team and the man at the top — it still is almost always a man — rose through the ranks by not rocking the boat.
Since the nuclear disaster last year in Fukushima, Son has also been unusual in speaking out against nuclear power.
While regular people are taking to the streets in droves protesting pro-nuclear policy, the business community, which includes nuclear-plant manufacturers such as Toshiba and Hitachi, has largely stayed a nuclear advocate. Son is behind solar-panel projects to encourage green energy as an alternative to atomic power.
Son has never made secret of his Korean ancestry, which has historically led to tragic discrimination in Japan, the colonial occupier of the Korean peninsula until 1945. Taunting in schools and difficulty in finding jobs and marriage partners are common experiences for the descendants of Korean immigrants. Two years ago, Son made his downtrodden minority roots a central theme in a company presentation that was a tearful but proud homage to his family.
Because Japanese culture frowns upon diversity and pushes homogeneity, such people rarely talk about it as a positive part of their success.
“This is someone who is very, very precious to me,” Son told a packed hall in 2010 as he outlined the company’s 30-year strategy, showing on a huge screen a fading black-and-white photograph of a woman, smiling in a dress. “She is my grandmother.”
She emigrated when she was 14, married his much older grandfather, and raised hogs in an impoverished part of Kyushu, the third largest of the islands that make up Japan.
His family’s circumstances improved over the years, shifting from raising hogs to running a restaurant, but Son began to feel ashamed of his Korean background as he grew older and even rejected his grandmother. He took on a Japanese name.
It was not until his decision to attend high school in the U.S. at age 16 that he vowed to become an entrepreneur, seeing it as a way to create a more inclusive world, he said at the end of his two-hour presentation, fighting tears.
Against that backdrop, Son triumphantly declared last Monday that with the Sprint deal his company had truly beaten Nippon Telegraph and Telephone, a former government monopoly and an iconic symbol of old Japan, and was on its way, he hoped, to be the No. 1 mobile company in the world. The combination of Softbank and Sprint will be the world’s No. 3 mobile company by revenue.
In Japan, Softbank was always an also-ran third to NTT DoCoMo, NTT’s mobile unit, and KDDI. That began to change after Softbank worked out a deal with Apple, thanks to Son’s U.S. connections, to be the first to offer the iPhone in Japan where the market was dominated by cellphones compatible only with the country’s special network-linking formats.
Softbank users in Japan have grown to more than 30 million from 19 million in 2008, the year it began offering the iPhone.
Daiwa Securities analyst Koki Shiraishi said Son was making a smart move with its Sprint acquisition, noting the risks were minor compared to the 2006 takeover of Vodafone Japan, which Son transformed into a profitable company, Softbank Mobile.
“The prospects for the latest deal are several notches better, considering the cash cow in its mobile business,” he said.