Yahoo Japan Corp. agreed to use Google Inc.’s Internet-search technology to widen its lead in the world’s second-largest economy.
Yahoo Japan will use Google’s Internet-search engine and advertisement delivery system, the Tokyo-based company said in a statement today, without disclosing financial terms. The length of the agreement hasn’t been decided, it said.
The Japanese Internet company rose in Tokyo trading on speculation a tie-up may help it expand the mobile-search business through handsets equipped with Google’s Android operating system. A deal may be a blow for Microsoft Corp., which last year agreed on a 10-year deal to combine its search business with that of Sunnyvale, California-based Yahoo! Inc.
“If Yahoo Japan started using Google’s search engine and if its services were then used on Android smartphones, an agreement may have big implications,” said Atsuo Takahashi, an analyst at Mizuho Securities Co. in Tokyo. “For Yahoo Japan, this deal could be quite positive.”
The Japanese Internet company, 35 percent-owned by Yahoo in the U.S. and about 40 percent by Softbank, had more than 52 million users as of March and its service accounted for more than 50 percent of the Japanese market, according to a Nomura Holdings Inc. report this month that cited a Nielsen Online survey. Google has about 31 percent market share, according to the report.
Sunnyvale, California-based Yahoo and Microsoft won regulatory approvals in the U.S. and Europe in February to integrate their web search businesses and challenge Google. Yahoo plans to use Microsoft’s Bing search engine on its sites and complete the integration in the U.S. by the end of the year.
The Wall Street Journal’s All Things Digital blog reported earlier Yahoo Japan may use Google’s search technology instead of Microsoft’s.
Yahoo Japan rose 1.2 percent to 35,150 yen on the Tokyo Stock Exchange, extending its gain to 26 percent this year. The Topix index has fallen a 6.8 percent.
To contact the reporter on this story: Adam Le in Tokyo at ale14@bloomberg.net