Softbank sees opportunity in Internet ads

For the Internet purists it amounts to heresy, but for Softbank head Masayoshi Son selling advertising on the Net is the way of the future.

For the Internet purists it amounts to heresy, but for Softbank head Masayoshi Son selling advertising on the Net is the way of the future.

There will be money to be made on the Internet, and since content largely will be free to users, content providers will instead have to rely on advertisers to create revenue, said Son in a speech here last week.

However, the business of selling advertising on the Internet is still in its infancy, with most large advertising agencies not yet having realised the Net's potential as a powerful interactive point-to-point marketing device, says Son.

"Whenever there is a gap between the potential and the understanding of the traditional major players, there is a big, big opportunity. So I'm glad to take advantage of this gap," he says.

To fill in that perceived void, the Japanese company has set up a US subsidiary, Softbank Interactive Marketing (SIM), which according to Son today owns a 40% share of the US Internet advertising market.

"We are the largest advertising agency on the Internet in the US by far," says Son.

SIM counts among its clients many popular Web sites, such as AT&T, the National Football League, NBC Interactive's Olympic site, Netscape Communications and Yahoo, he says.

And the market is still growing rapidly, with SIM's advertising sales volume doubling every two or three months, says Son.

In related news, SIM last week also announced that it has signed on as the advertising sales agency for Interactive Imaginations' Commonwealth Broadcasting Network, which features over 500 small and emerging Web sites.

Softbank is now trying to leverage that US experience at home in Japan, and recently set up a joint venture with advertising giant Dentsu that will sell ads on the Internet to Japanese customers, says Son. Dentsu holds a 51% stake in that venture, with Softbank holding the remaining 49%, he says.

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