Once a corporate cousin of the U.S. Yahoo website, Yahoo Japan is now a separate company under SoftBank's control and increasingly focused on commerce rather than its original core business of selling advertising against content such as news and sports.
That shift will accelerate with Yahoo Japan's $3.7 billion plan to take a 50.1% stake in Japanese online fashion retailer Zozo Inc. Zozo founder Yusaku Maezawa, who is selling most of his 36.8% stake and resigned as chief executive on Thursday, said he wanted to leave the company he built and focus on personal ambitions including traveling into space -- twice.
With Zozo in its stable, Yahoo Japan hopes to attract younger fashion-conscious consumers in competition with Amazon, whose Japan unit had sales of $13.8 billion last year, and homegrown rival Rakuten Inc.
"We are aiming to become No. 1 in domestic sales volume" in the next five years or so, said Yahoo Japan Chief Executive Kentaro Kawabe at a news conference. "Some say Rakuten and Amazon are too strong, but with this capital alliance with Zozo, we are quite close to reaching that goal."
Mr. Maezawa said he decided recently that at 43, his life was at a turning point. Mr. Maezawa signed up last year to fly around the moon with Elon Musk's SpaceX vehicle in 2023, and he disclosed at the news conference that he plans an additional moon trip. He didn't give details but said he would use some of his newly available leisure time to study Russian.
In a surprise appearance, SoftBank's founder and chief executive, Masayoshi Son, took the stage in a Zozo brand T-shirt that matched Mr. Maezawa's. Mr. Son said he was approached by Mr. Maezawa and asked for advice about how he could start his second life.
Mr. Son took credit for getting Mr. Maezawa to start talking to Yahoo Japan about a sale, but Mr. Maezawa said later his friend got it wrong because the two sides had already been discussing cooperation.
Compared with general merchandisers such as Amazon, Zozotown, started in 2004, is a more popular fashion platform for trend-conscious consumers. Most of its customers are women who tend to be in their 20s and 30s.
"For Zozo to grow further, Zozo had to reach out to a wider range of customers, not only fashion lovers. Yahoo is facing challenges in the areas of fashion and young consumers," said Mr. Maezawa. "This is an alliance like a marriage" in which each company can fill the other's flaws, he said, while acknowledging that as a bachelor with a well-chronicled social life he might not be an expert on marriage.
Keiichi Yoneshima, an analyst at Credit Suisse, said the deal would help both companies become more efficient in logistics, payments and advertising. Yahoo Japan shares closed up 2.3%.
The total Japanese e-commerce market expanded to nearly Yen18 trillion ($167 billion) in 2018, more than doubling in eight years, according to the Ministry of Economy, Trade and Industry.
Yahoo Japan was born in 1996 as a joint venture of SoftBank and what was then Yahoo Corp. of the U.S. A fund called Altaba Inc. inherited Yahoo Corp.'s stake in Yahoo Japan when the U.S. site was sold to Verizon Communications Inc., and last year Altaba completed the sale of its entire Yahoo Japan stake.
The U.S. Yahoo site has struggled to keep users with the rise of social media sites. Yahoo Japan, while facing similar challenges, still is the dominant news portal in Japan. A Reuters Institute survey of news consumption habits this year found that 51% of Japanese respondents had used Yahoo Japan in the past week, easily beating other news sites.
This fall, Yahoo Japan plans to start a premium online shopping mall where only shops that pass the company's strict requirements can open a store. The website is called "PayPay Mall," named after a smartphone payment company jointly operated by Yahoo and SoftBank.
"We will continue to look for an opportunity to buy an e-commerce company if there are any shining ones like Zozo," said Mr. Kawabe, the Yahoo Japan CEO.