Yahoo Japan Says It's Considering Using Google Internet-Search Technology

Yahoo Japan Corp. is considering using Google Inc.’s Internet-search technology to widen its lead in the world’s second-largest economy.

The company hasn’t made a decision, said Toru Nagano, a spokesman at Tokyo-based Yahoo Japan, declining to provide details. The former joint venture between Yahoo! Inc. and Japan’s Softbank Corp. may use Google’s search technology instead of Microsoft Corp.’s, the Wall Street Journal’s All Things Digital blog reported earlier.

The Japanese Internet company rose in Tokyo trading on optimism 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, which last year agreed on a 10-year deal to combine its search business with that of Sunnyvale, California-based Yahoo.

“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.

Yahoo-Microsoft Deal

Yoshito Funabashi, a Tokyo-based Google spokeswoman, was not immediately available for comment.

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.

Yahoo Japan rose as much as 3.6 percent to 36,000 yen on the Tokyo Stock Exchange. The shares have risen 26 percent this year, compared with a 6.6 percent drop in the Topix index.

To contact the reporter on this story: Adam Le in Tokyo at ale14@bloomberg.net