Yahoo likely to call time on Japan operations

Softbank currently holds the majority stake in Yahoo Japan. The move could see Yahoo transfer 35 per cent stake to Softbank, which would free up an estimated US$8 billion to channel into other markets.

Although Yahoo Japan is the most popular search engine in the market with a share of nearly 60 per cent, the current arrangement means Yahoo has little control in the running of the operation or over its branding. A source close to the company described Yahoo Japan as running "an autonomous ship", pointing to the decision by Softbank last year to adopt Google's search advertising technology over Yahoo's and Microsoft's.

The source said that withdrawing from Japan would not have any major negative impact on Yahoo, but would undoubtedly open up broader discussions on the company's growth strategy in China, where it holds a 40 per cent stake in Alibaba Group. Alibaba founder Jack Ma has expressed a desire to buy that stake back, which would release a further estimated $10 billion.

"It will not affect Yahoo's day-to-day operations, but would be another blow and raises the question as to whether [the company] is about to be dissected for the sum of its parts," the source said.