Yahoo Japan in Talks for Banking Alliance

By KOZO MIZOGUCHI

TOKYO – Yahoo Japan’s stock jumped 7.6 percent Wednesday after the company said it is in talks with Sumitomo Mitsui Banking Corp. to form a possible alliance in online banking, a move that could create new sources of revenue for the Internet portal operator.

Yahoo Japan Corp. and Sumitomo Mitsui Banking are discussing the possibility of forging a capital tie-up, according to Yahoo Japan spokesman Toru Nagano. He declined to give further details saying that nothing has yet been decided.

Teaming up with SMBC, the core bank unit of Sumitomo Mitsui Financial Group Inc., would enable Yahoo Japan to offer financial services to customers using its online services.

Yahoo Japan’s stock surged to 71,1000 yen ($603) on the news, while Sumitomo Mitsui Financial Group Inc., SMBC’s holding company, rose 0.8 percent to 1.25 million yen ($10,593).

Japanese business daily Nihon Keizai reported Wednesday that SMBC and Yahoo Japan are to establish a joint venture as early as this autumn to buy SMBC’s entire 57-percent stake in online bank Japan Net Bank.

The move would mark the first tie-up between a major Internet business and one of Japan’s megabank, and the companies are expected to announce the plan by the end of this week, the daily reported.

Yahoo Japan would effectively become a major shareholder in Japan Net Bank, with an indirect stake of almost 30 percent, it said.

The report said that people using Yahoo Japan’s online auction or shopping services would be able to settle transactions over the Internet.

A spokesman for SMBC, who declined to be named citing company policy, confirmed the company is considering the possible alliance with Yahoo Japan.

For SMBC, an alliance with Yahoo Japan, a major player in the country’s Internet business, could help it tap into a broader market for its financial products and services.