Zhao Tong: The Rise of SoftBank (II) Internet Overlord

After understanding the legend of Son Zhengyi, let's take a look at his "local tycoon" enterprise - SoftBank. In February 1979, Son founded unison world, a software development company in the United States, for 100 million yen from the sale of portable translation machines, when he was a student in the Economics Department of the University of California. The following year, at the same time as he graduated, Sunda returned to Japan and moved the company to Fukuoka City. He raised 100 million yen from relatives and Fellow Koreans in Japan, and the company's main business changed from software development to software wholesale. In just a few years, the company's software wholesale business has grown considerably. In 1990, Son changed the company's name to "softbank" and listed it on the tertiary market in Japan in 1994, and SoftBank completed its first steps in entrepreneurship.

If Jobs was an extraordinary artist, Son was a genius businessman. After SoftBank went public, Sun made a series of acquisitions. In 1996, it invested in Yahoo USA and established Yahoo Japan, which is now the first website in Japan. In 2000, it invested in the then bankrupt Japanese bond bank and became its largest shareholder, although in 2003 these shares were sold entirely to an investment fund in the United States, and through this participation, SoftBank learned a lot of knowledge of the financial industry and laid the foundation for its Internet banking business. In 2004, it acquired Nippon Telecom and began the pace of SoftBank's current main business, the mobile communication business. In 2005, it acquired the Ōei professional baseball team; in 2006, it paid a huge amount of 1.75 trillion yuan to acquire Vodafone Japan, turning it into one of the three major mobile phone companies in Japan. Son's acquisition has not been successful every time, and the acquisition of Kingston Technology and TV Asahi is two major failures.

Son's series of acquisitions are considered by many Japanese to be just capital speculation and money games, and mainstream media criticism of SoftBank is also endless. A good example: SoftBank was divided into "wholesale and retail" sectors when it went public in 1994, and it was not until October 2006, six months after the completion of the acquisition of Vodafone, the third oldest mobile communications company in Japan, that became the "intelligence communications" section, and everyone who understands it knows that this is undoubtedly a kind of contempt for SoftBank by management. While being ridiculed by the mainstream, SoftBank has a hardcore following that mostly appreciates Sun's courageous and rebellious personality, but the most important reason for SoftBank's success is due to the fact that the prices offered by its companies are much lower than those of their Japanese counterparts. The author also used SoftBank's broadband network in 2001, and its after-sales service is not flattering, for an international student, cheap price is far more important than service. There is an unspoken rule in Japanese business practices that Chinese cannot understand: when a leading enterprise prices a certain commodity or service, there is no need for any behind-the-scenes collusion, and the price of following the enterprise is generally the same, and more competition is in the service, which is an important reason for the world-class service in Japan. After sacrificing a certain service, SoftBank competes at half the price or even lower, so it is also reasonable for peers to hate it and get the recognition of consumers at the same time.

Looking back at SoftBank's growth history, it started as a software development company that started its own business, then switched to software wholesale, became an Internet company through investment, and then became one of the three major mobile phone companies in Japan after a series of acquisitions. As of the end of March 2013, SoftBank has nearly 800 large and small enterprises, but SoftBank's ambitions have not been curbed, and in July 2013, it successfully acquired the US mobile phone company for $21.6 billion, taking another step towards realizing its dream of becoming the world's Internet hegemon. Compared with the large-scale acquisition operations of some IT giants such as Apple and Google, their purpose is mostly to enhance their main business, while SoftBank is moving into new areas through acquisitions, and its growth model is also jumpy.

There is a question worth recalling when it comes to Son Zhengyi, whether he is a reformer of the new generation or a rent-seeker of the old generation, and I think it is both. Initiatives such as Yahoo Japan and Internet Banking undoubtedly played a decisive role in the development of Japan's IT industry; cheap broadband services not only greatly lowered the threshold for consumers to enter the Internet world, but also an open challenge to the old forces; but, as Son Zhengyi himself admitted; the most important purpose of the high-priced acquisition of Vodafone Japan was to obtain rare mobile phone radio wave access, a typical rent-seeking behavior; after the Great Tohoku Earthquake in Japan in 2011, on the issue of new energy, Sun made full use of his public influence to directly intervene in the government's decision-making, and the rent-seeking behavior can be described as vivid. Readers may wonder whether SoftBank will consider entering the Chinese market, the author believes that there is a certain degree of difficulty, because the business talent of China's Internet tycoons is more than that of Son Zhengyi.