Yahoo! Japan joins DSL market

Yahoo! Japan is teaming up with Softbank to enter the domestic ADSL market.

The move is a first toe in the ISP waters for Yahoo!, which has hitherto managed to maintain a tight focus on its internet portal business.

The merger is backed by Softbank, the Japanese internet investment house, which will own 90 per cent of the venture with 10 per cent in the hands of Yahoo! Japan.

Yahoo! Japan and Softbank are clearly undeterred by the problems experienced by Excite@Home in Europe.

Following a failed merger with Dutch-based broadband company Chello last year, Excite laid off over 600 staff this year. The company announced a final retreat from Europe this year, leaving only joint ventures in the UK and Italy.

Internet penetration in Japan is lower than in the US and Europe, with broadband lagging correspondingly behind most European countries.

Incumbent telco NTT is also a barrier to ADSL rollout. The company, which controls the existing domestic telephone lines which ADSL uses to provide high-speed internet access, has been attacked for its reluctance to allow competitors to install DSL equipment in its exchanges.