After selling 4% stake in Yahoo! Softbank invests $200 million in InMobi

Softbank announced that it will be investing $200 million in InMobi, an independent mobile ad network.

The funding will take place in two tranches — $100 million in September 2011 followed by an equivalent tranche in April 2012.

This is a major transformation for Softbank which once burnt their fingers due to investment in Vodafone’s Japan venture. Softbank is transforming itself from an Internet provider into Japan’s third-largest and fastest-growing cellphone carrier and now to a global mobile ad major.

The partnership will provide Softbank and InMobi with opportunities to further explore global scale collaboration in the fast growing mobile ad market. It is also expected to generate further synergies between InMobi and Softbank, given the significant number of prominent Asian Internet companies in Softbank’s investment portfolio.

Last week, Softbank sold most of its 4 percent stake in Yahoo, which is said to be looking for a buyer. Softbank picked up Yahoo shares in 1995 when the Internet company was in its infancy.

The difference between the price paid for shares in 1995 and the value of the shares as the Citibank loan is settled will result in a profit of $990 million for Softbank in the fiscal year ending March 2012.

I hope the partnership with InMobi, a fast-growing startup with significant mobile expertise and an outstanding technology platform; will further accelerate the pace of development in the mobile Internet space globally. We believe this partnership will help Softbank become the No. 1 Internet company in Asia and I look forward to working with the InMobi team,” said Masayoshi Son, chairman and CEO of Softbank.

Softbank is Japan’s only carrier of the iPhone and iPad. It has enjoyed strong earnings growth over the past few years, thanks to Apple products. In the last fiscal year, it posted a group net profit of Â¥189.71 billion, on revenue of Â¥3.005 trillion.

The $200 million investment, one of the largest to date in the mobile internet space , will help InMobi create value across the mobile ecosystem globally through world-class advertising, mobile payments using SmartPay, and HTML5 rich media production and distribution using the recently acquired Sprout platform.

The size of the investment and quality of investor validate the enormous potential in mobile today and strengthen our role in helping the industry evolve. With a global leader like Softbank behind us, we are now well positioned to fully capitalize on the opportunity before us through substantially increased product innovation, deeper market penetration, and acquisitions across the mobile ad value chain,” said Naveen Tewari, founder & CEO of InMobi.

Recently, InMobi announced the acquisition of Sprout, whose HTML5 rich media creative platform helps agencies and brands reduce the complexity of rich media mobile ad creation and distribution. InMobi’s global presence combined with Sprout’s rich media technology will help the mobile advertising industry easily build and distribute engaging rich media ads to consumers everywhere.

By Baburajan K
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