AOL Concedes Defeat in Japanese Market

18 May 2004

Time Warner's internet subsidiary AOL has shocked the market by withdrawing from Japan after eight years.

It is selling out to rival eAccess in a Y21.billion ($18.5m; €16m; £11m) deal which leaves the parent company without an internet presence in the market.

Japan is the world's fastest growing broadband internet market. But AOL has struggled since it launched there in 1996, attracting only 400,000 subscribers.

By comparison, younger rival Yahoo BB has managed 4m subscribers in the three years since it launched.

eAccess says it was asked by AOL to take over the business.

Effectively AOL had little chance of making inroads into the fiercely competitive domestic ISP market which is dominated by Fujitsu, NEC and Sony.

Analysts say AOL's problems were highlighted in December when telecoms giant NTT DoCoMo sold back to Time Warner the 40% stake it acquired in AOL in 2000 for $1000m.

Data sourced from Financial Times; additional content by WARC staff