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Integrated Report 2018 Tokyo 102-8282, Japan Published in September 2018 Year Ended March 31, 2018 Profile & Growth Story Yahoo Japan Corporation Kioi Tower 1-3 Kioicho, Chiyoda-ku Integrated Report 2018 Tokyo 102-8282, Japan Published in September 2018 Year ended March 31, 2018 Profile & Growth Story Mission, Vision, and Values Firmly established as a “problem-solving engine,” Yahoo! JAPAN’s mission is to provide useful, solutions- oriented services by leveraging Internet technologies. In order to realize Yahoo! JAPAN’s vision of UPDATE JAPAN, we have formulated a set of five action guidelines entitled Yahoo! Values, which are thoroughly infused in our work culture and guide our day-to-day business activities. Mission Kentaro Kawabe Problem-solving Engine President and Representative Director, President Corporate Officer, Yahoo! JAPAN continues to pursue initiatives to solve problems in people’s daily lives and Chief Executive Officer (CEO) problems facing society by leveraging information technologies. As a “problem-solving engine,” Yahoo! JAPAN will contribute to people and society through its various businesses. In the 22 years since its founding, Yahoo Japan Corporation (“Yahoo! in which we promptly ascertain these changes and boldly take on JAPAN” or “the Company”) has expanded its business in accor- challenges in response, I believe we can achieve sustainable growth. dance with innovation in information technology. After riding the Going forward, we will continue to contribute to society by solv- waves of the desktop Internet generation, which focused on PCs, ing problems facing both people and society through information Vision and the mobile Internet generation, which focused on smartphones, technologies while we pursue efforts to further improve our corpo- Yahoo! JAPAN is now taking on challenges in the data generation, rate value. which represents the next wave of the journey. As a new endeavor for the Company, we have decided to publish Against the backdrop of outstanding technological innovations an integrated report, which introduces both financial and non-financial such as AI, the Internet of Things (IoT), and virtual reality (VR), the information in an integrated manner. With this integrated report, we structure of society is now becoming more complex, and the speed will provide explanations that allow our various stakeholders to better at which changes occur is becoming remarkably faster. Additionally, in understand the Company’s businesses, initiatives, and vision. At the the Internet industry, there have been significant changes to the same time, we will continue our efforts to improve our communication By drawing on the power of the Internet, Yahoo! JAPAN will take on further challenges device and communications environment. By adopting an approach while receiving feedback from our stakeholders. to inspire hope and to bring about progressive change to Japanese society. CONTENTS Values Profile & Growth Story Sources of Our Value Editorial Policy This integrated report provides a comprehensive overview of the business 3 Growth Story 39 UPDATE JAPAN: operations and corporate activities of Yahoo Japan Corporation (“Yahoo! All Yahoo! JAPAN Individual Strength 5 Value Creation Our CSR Activities JAPAN” or “the Company”) and its consolidated subsidiaries and affiliates 9 At a Glance 47 Corporate Governance (“the Yahoo Japan Group” or “the Group”), including but not limited to infor- mation about finances, strategies, results, and other aspects of our busi- 11 Financial and Non-financial Highlights 55 Risk Management ness operations in addition to descriptions of our corporate governance Discover, Propose, and Improve Compelling Sense of Ownership Absolute Commitment 59 Information Security system and corporate social responsibility (CSR) activities. Because this Our Strategy integrated report is provided primarily for the edification of our stakeholders, those topics deemed to be of particular interest to said stakeholders were Data Section 13 CEO Message selected for inclusion. We sincerely hope that this integrated report helps to deepen stakeholders’ and other readers’ understanding of the Company To continue to solve the various problems facing Japan through the power of the Internet, we have 17 Growth Strategies 63 Financial Section and the Yahoo Japan Group. For more detailed information, please refer to 23 Special Feature: 140 Risk Factors our Investor Relations website. adopted five action guidelines entitled Yahoo! Values, which represent the values of which our employees Creating the Future through 162 Principal Associated Enterprises https://about.yahoo.co.jp/ir/en/ should remain ever-mindful and which provide an overview of how employees should carry out their work. New User Experiences 163 Organization Chart of Yahoo Japan 25 Technological Strategy Corporation (Non-consolidated We believe our employees should embody these values with the goal of continuing to evolve both Disclaimer on Forward-looking Statements 27 Financial Strategy basis) All forward-looking statements appearing in this integrated report, including personally and professionally on behalf of our users. 29 Human Resources Strategy 164 Corporate Information/ but not limited to forecasts, estimates, and future strategies, are based on Shareholders’ Information information available at the time of publication and certain assumptions Business Review generally deemed reasonable. Such forward-looking statements are subject to various risks and uncertainties, including but not limited to unanticipated 31 Business Overview changes in the competitive environment, economic trends, market demand, and outcome of pending or future litigation, in addition to indeterminate fac- 32 Media Business tors and faulty presuppositions. Should one or more of these risks or uncer- 35 Commerce Business tainties materialize, our actual results or performance may vary materially from those described in the relevant forward-looking statements. We there- fore kindly advise you to refrain from relying completely on these forward- looking statements. The Company assumes no obligation to update or revise these forward-looking statements in light of future developments. 1 Yahoo Japan Corporation Integrated Report 2018 2 Profile & Growth Story Ikyu Corporation The Japan Net made into Bank, Limited Fiscal 2017 Results Growth Story subsidiary made into (currently consoli- consolidated dated subsidiary) subsidiary ◼ Revenue Transitioned to a company with audit Continuing to Drive the Internet Services Industry and supervisory ¥897.1billion as One of the Largest Player in Japan committee ASKUL Corporation made into consoli- ◼ Operating income Since launching its first service in 1996, the Yahoo Japan Group has repeatedly realized self-transformation dated subsidiary through such means as evolving and expanding its business operations in accordance with the changing GyaO Corporation times and user needs. By doing so, the Group has helped solve various problems in society. Opened ¥185.8 billion (currently GYAO LOHACO online Corporation) made Guided by our corporate philosophy of “solving the problems of the people and society by leveraging shopping site for into subsidiary daily necessities information technologies,” we will improve the quality of life for our users and contribute to the creation of (currently consoli- ◼ Total monthly an even better society through the provision of outstanding services. dated subsidiary) page views* Yahoo! Premium paid-membership million service launched 70,350 Yahoo! Auctions * Page views for final month of (currently Listed on the each fiscal year YAHUOKU!) First Section of service launched the Tokyo Stock Exchange Yahoo! Shopping service launched Yahoo! News service launched Total Yahoo! JAPAN daily page views Yahoo! Mail Yahoo! Weather surpass 100 million service launched service launched 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (Fiscal year) Implementing Self-Transformation in Accordance with the Changing Business Environment Inoue regime (1996–2011) Miyasaka regime (2012–2017) Kawabe regime (2018–) Aiming to be the No. 1 PC-based Internet service Promoting the Smartphone First policy Expanding the Commerce Business Promoting data utilization 1996 Apr. 2001 Sep. 2008 Jul. 2012 Apr. 2013 Oct. 2015 Apr. 2015 May 2017 Jun. 2018 Jan. 2018 Feb. Optimization of Yahoo! JAPAN Transition to Announcement of Launch of Renewal of Yahoo! JAPAN Provision of Yahoo! Premium to Announcement of Announcement of Launch of Yahoo! JAPAN Launch of Yahoo! BB service services for iPhone new management structure new e-commerce strategy Yahoo! JAPAN Card smartphone version top page SoftBank members new management structure DATA FOREST Initiative Yahoo! JAPAN was launched as the The launch of Yahoo! BB commercial After SoftBank began exclusive sales In response to rapid smartphone In our Yahoo! Shopping service, In collaboration with our consoli- In our renewal of the Yahoo! JAPAN We began providing Yahoo! Pre- Upon adopting the new challenge By combining the data possessed Internet’s first commercial Japanese- high-speed Internet connection ser- of Apple’s iPhone 3G model in Japan, proliferation and related changes in we announced the transition from dated subsidiary, YJ Card Corpo- smartphone version top page, we mium monthly membership service of shifting from a smartphone com- by corporations, local govern- language search engine, providing vice, offering unlimited access for we began the process of optimizing the environment for Internet use, a fee-based revenue model to one ration, we entered the credit
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