In the United States, Yahoo is nearly synonymous with decline, controversy and instability. In Japan, however, the company can lay claim to being king of the Internet mountain.
On Sunday, after five months on the job, Scott Thompson become the third chief executive to quit Yahoo in as many years, a track record that’s eroded investor confidence in a firm that helped popularize the World Wide Web.
Under pressure from activist investors, the Silicon Valley company admitted that Thompson misrepresented his academic credentials, claiming he possessed a computer science degree when he didn’t. His exit kicked off a frenzy of punditry on how new CEO Ross Levinsohn should right the Silicon Valley company, which remains profitable and is one of the world’s most-visited websites.
Meanwhile, Yahoo Japan is doing great. “The company has seen both revenue and profit rise for the past five years as it dominates its domestic rivals,” The Japan Times reports.
It’s even doing better than Google Japan, the newspaper writes:
Yahoo Japan logged 18.4 billion page views and 66 million unique visitors in February, compared with 13.4 billion page views and 62.7 million unique visitors for top rival Google Japan and its affiliates, according to comScore Japan. Those numbers effectively make Yahoo Japan and the sites under its banner the most popular in Japan.
On Monday, to underline its viability, Tokyo-based Yahoo Japan released a statement saying Thompson’s exit won’t affect its business or hamper discussions in which Yahoo is considering offloading its stake in its Japanese affiliate.
The Japanese Internet and telecommunications group Softbank holds the biggest share of Yahoo Japan, with a 40 percent stake. Yahoo holds a 35 percent stake that last year was valued at around $5 billion (more than a quarter of Yahoo’s valuation). Since last year, Yahoo has reportedly been considering selling its stake. That possibility is even more likely now, as Levinsohn could use excess cash to restructure Yahoo’s American operations.
Why is one Yahoo doing so much better than the other? The Japan Times suggests Yahoo Japan has seized a large share of the country’s Internet traffic and, unlike its American affiliate, kept that ground largely because it’s engaged users in ways the American version of Yahoo has failed to grasp.
Critics in the U.S. often say Yahoo is too much of a Web 1.0 company that doesn’t suitably engage its users in Web 2.0-style, like Google and Facebook. Yahoo Japan, on the other hand, has been far more successful in creating virtual communities where users generate content and where they network socially and professionally. As the The Japan Times reports:
According to comScore’s Maekawa and General Manager Daizo Nishitani, Yahoo Auction is Japan’s largest auction site in sales, while Yahoo News and Yahoo Chiebukuro (Pearls of Wisdom), a user-generated Q&A site, are the nation’s tops in those categories. The same goes for Yahoo Mail.
It would be nice to suggest Levinsohn should take Japanese lessons. If only it were so simple.