Profits boost for Yahoo Japan

26 January 2011

TOKYO: Yahoo Japan's plans to strengthen its ties with Google are on track, with strong ad revenues bolstering the firm's profits for fiscal Q2 2010.

Net income at the company reached ¥24.7bn ($300m, €220m) for the three month period, comfortably ahead of expectations and 18% higher than the previous year.

Overall revenue was up 5.8% to ¥75bn, while operating profit increased 13% to ¥41.1bn.

While Yahoo Inc owns a 35% stake in Yahoo Japan, the Asian firm operates independently from its US parent.

The solid earnings put the company in good shape to continue its alliance with Google, which was announced in July 2010 and officially cleared by the Japanese Fair Trade Commission in December.

Initial news of the tie-up resulted in complaints from Microsoft and Rakuten over competition concerns.

Under the terms of the partnership, Yahoo Japan now incorporates Google's search technology.

Searches from Yahoo Japan still differ from Google searches, as the companies use separate systems to determine which results are displayed.

The firm's ad revenues could improve once it begins using Google's search ad system later this year.

Following the announcement of the results, Masahiro Inoue, the firm's president, said that the partnership is "moving forward smoothly".

Yahoo Japan is the Asian nation's most popular web portal.

Data sourced from Dow Jones; additional content by Warc staff