Yahoo’s Internet Business Could Draw Interest From SoftBank – Wall Street Journal

Dec. 2, 2015 2:24 a.m. ET

TOKYO—Now that Yahoo Inc. YHOO -0.30 % 's board is weighing a sale of the company's core Internet business, any shortlist of potential buyers would feature a perennial candidate, SoftBank Group Corp. 9984 1.33 % of Japan.

Analysts and investors have long seen SoftBank, which owns Sprint Corp. S -0.55 % and a portfolio of other telecommunications and digital businesses, as a potential bidder for Yahoo, which has struggled to turn around its Internet operations.

Under President Nikesh Arora, who joined SoftBank last year from Alphabet Inc.'s Google, the Japanese company has been moving to expand its Internet and media businesses, including investments in Asian ride-sharing companies and U.S. movie studio Legendary Entertainment.

Adding Yahoo, some analysts say, could help SoftBank accelerate its expansion outside Japan, giving it a broader digital platform for entertainment, e-commerce and other services.

SoftBank declined to comment.

SoftBank's core business in Japan, where the company is one of three big wireless networks, already offers a range of digital services that piggyback on the mobile platform. SoftBank is also the largest shareholder in Yahoo Japan Corp. 4689 2.50 % , which is separate from Yahoo Inc., though the U.S. company owns a stake in it.

The Wall Street Journal reported earlier citing people familiar with the matter that Yahoo's board will meet this week to consider how to make the most of its 35% stake in Yahoo Japan, worth $ 8.5 billion, and its 15% stake in Chinese e-commerce giant Alibaba Group Holding Ltd. BABA -0.10 % , worth about $ 32 billion. One option could be a spinoff.

Alibaba declined to comment.

Masaki Hanyu, a spokesman for Yahoo Japan, said the company is monitoring the situation.

"We would like to have close talks with Yahoo Inc. to come up with the best solution," he said. "Under the circumstances, nothing has been decided yet."

Yahoo is also considering a sale of its web properties, an idea it previously opposed, The Wall Street Journal reported.

That would remove some potential obstacles to a SoftBank bid for Yahoo

SoftBank is the largest shareholder in Alibaba, with a 32% stake, and in Yahoo Japan, with a 43% stake. Adding the Yahoo stakes would give SoftBank majority ownership of these companies, but SoftBank founder Masayoshi Son has said in the past that he prefers to maintain minority holdings in them.

Removing the Alibaba and Yahoo Japan stakes would also make Yahoo easier for SoftBank to swallow.

Still, that would leave the question of why Mr. Son would want to take on a project that another former Google executive, Yahoo Chief Executive Marissa Mayer, has struggled to turn around.

Under Mr. Arora, SoftBank has focused on making venture capital-style investments in risky but potentially fast-growing startups in markets such as India and Southeast Asia. Yahoo doesn’t fit into that mold.

"I think the U.S. Internet business is not so attractive for SoftBank at the moment," said Satoru Kikuchi, an analyst at SMBC Nikko Securities. "They want to focus more on Asia."

SoftBank has also said it would emphasize deleveraging after taking on significant amounts of debt in the Sprint acquisition and other deals.

Write to Eric Pfanner at eric.pfanner@wsj.com