SoftBank Group Corp. is paying Verizon Communications Inc. 178.5 billion yen, or about $1.61 billion, for a perpetual license to use the Yahoo and Yahoo Japan trademarks.

The deal was announced today by SoftBank’s Z Holdings subsidiary.

SoftBank is a Tokyo-based conglomerate with a significant presence in multiple parts of the technology sector. The company is one of the largest wireless internet providers in Japan, with tens of millions of subscribers. Through its venture capital arm, SoftBank has invested many billions of dollars in startups across areas such as warehouse robotics, autonomous driving and the data center chip market, among other markets.

Yet another area where SoftBank has a big presence is the consumer internet services segment. The company’s Z Holdings subsidiary, the unit that announced the trademark deal with Verizon today, owns Yahoo Japan. Yahoo Japan operates Japan’s most widely used search engine, a popular email platform and a raft of other products. SoftBank originally launched the business in 1996 as a joint venture with Yahoo Inc. and later acquired full ownership.

The reason Verizon owns the Yahoo trademark is because the carrier acquired Yahoo Inc. in 2017 for $4.48 billion. As part of the deal announced today, SoftBank’s Z Holdings subsidiary is buying a perpetual license to the Yahoo and Yahoo Japan brands that will allow it to use them without making any royalty payments in the future.

Moreover, “the new arrangements will also provide the ZHD Group with greater flexibility in the use of the Yahoo brand and licensed technology and in the development of its businesses,” Z Holdings said in a statement. The deal specifies that the relevant brand and technology assets “may be used in Japan throughout the ZHD Group,” the SoftBank subsidiary stated.

The timing of the transaction may be related to Verizon’s recently announced plans to sell its Verizon Media unit to private equity firm Apollo Global Management. The Verizon Media unit includes, among other assets, Yahoo News and certain other businesses that the carrier obtained through its purchase of Yahoo Inc. in 2017. Buying the perpetual trademark license from Verizon will allow SoftBank to continue operating Yahoo Japan in its current form even after Verizon Media moves to Apollo when the sale completes.

Verizon is offloading its media assets to free up resources for its core internet business. Like other carriers, Verizon is spending billions of dollars to upgrade its wireless network to the 5G standard, which promises to speed up mobile connections by up to 100 times. The standard is also creating new revenue streams for carriers, particularly in the enterprise, when they can use the technology as the basis of new edge computing offerings such as miniature wireless networks deployed at factories. 

Photo: SoftBank