Report: Sony in talks to acquire Japan's top ISP

ITworld.com |  Networking

Sony Corp. has started talks with Fujitsu Ltd. on the possibility of acquiring Nifty Corp., Japan's largest Internet service provider (ISP), according to a report in the Friday morning edition of the Nihon Keizai Shimbun.

The two companies first met in November and Sony will make a decision on whether to acquire the company by February, the report said. The acquisition price is expected to be about 100 billion yen (US$759.5 million), and Sony is considering merging Nifty with its own So-net service should the deal go ahead, said the newspaper.

"We have been engaging in some discussions concerning possible cooperation in the field of Internet-related business, but no specific decisions have been reached and we are unable to comment at this stage," Sony said in a statement issued Friday in reaction to the report.

With about 5 million subscribers, Nifty is Japan's leading ISP and also one of the oldest. Started in 1987 as NiftyServe, the company originally operated a bulletin board system based on CompuServe's software and was the partner for CompuServe in Japan. In the mid-1990s the company switched to a conventional ISP service and has been growing ever since.

Like its nearest competitors, NEC Corp.'s Biglobe, Nifty owes most of its success to the dominance of its parent company in the local PC market and thus its ability to place a Nifty logo on the desktop of every new computer shipped.

Today, the Nifty service encompasses more than 700 member forums, a throwback to its days as a BBS service, and a growing number of online shops, portal sites and member home pages. Thanks to the popularity of its services, many of which are offered on a subscription basis, and the large number of user home pages, Nifty ranked as the No. 2 Internet property in Japan during November with a 49.1 percent reach, according to NetRatings Japan Inc.

So-net, which is run by Sony Communication Network Corp. (SCN), is the No. 6 ISP in Japan and has about 1.6 million users. An acquisition of Nifty, should it take place, would not be SCN's first purchase. In October the company announced plans to acquire JustNet from WebOnline Networks Ltd.

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