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Yahoo Japan Shares Fall on E-Mail Privacy Inquiry: Tokyo Mover

Yahoo Japan Shares Fall on E-Mail Privacy Inquiry
Japan’s largest Internet company by market value will start using a program in August that automatically detects key words in e-mails, said Asuka Isayama, a spokeswoman for the Tokyo-based web-portal operator. Photographer: Robert Gilhooly/Bloomberg

June 25 (Bloomberg) -- Yahoo Japan Corp. fell the most in three weeks in Tokyo trading as the government said it will question the company about plans to display advertisements based on the contents of users’ e-mail messages.

Japan’s largest Internet company by market value fell 1.5 percent, the biggest decline since June 1, to 24,870 yen at the close on the Tokyo Stock Exchange. The benchmark Nikkei 225 Stock Average fell 0.7 percent.

Yahoo Japan will start using a program in August that automatically detects key words in e-mails, said Asuka Isayama, a spokeswoman for the Tokyo-based web-portal operator. The Ministry of Internal Affairs and Communications plans to ask Yahoo Japan about the service, said Noriyuki Morisato, a deputy director at the telecommunications consumer policy division, confirming an earlier report by the Yomiuri newspaper.

“We’ve been notifying users of our plan to introduce the service since the end of May, and we will also offer an option to opt out,” Yahoo Japan’s Isayama said. “So we don’t think there’s a problem.”

Morisato declined to comment on whether the service violates privacy laws.

Incoming e-mails from senders not using Yahoo would also be subject to scanning, Isayama said. The company’s e-mail service has about 15 million users in Japan, she said.

“There won’t be any impact on Yahoo’s earnings” from a potential government probe, said Eiji Maeda, a senior analyst at SMBC Nikko Securities Inc. in Tokyo. “Still, the market is taking the news as negative.”

Softbank Corp., Japan’s third-biggest mobile-phone company, owns about 42 percent of Yahoo Japan, while Yahoo! Inc. owns about 35 percent, according to data compiled by Bloomberg.

To contact the reporters on this story: Shunichi Ozasa in Tokyo at sozasa@bloomberg.net; Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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