Alison’s home was actually a village, a compound of intricately constructed wooden houses modeled after a Japanese emperor’s palace. It took almost a decade to design and build the 23-acre property, which also includes a lake and a waterfall that is operated by an on-off switch. All buildings were constructed without nails and had mud plaster walls to withstand a 7.3 Richter-scale earthquake. In total, Ellison’s tribute to Japanese culture and history was worth nearly $70 million.
The talk around the table that day was about crazy internet valuations in the stock market. But Massa and Jobs were more interested in what would happen after the dotcom bubble. Massa says, “I said I was focused on the Internet—and he agreed that the Internet was the future. Both men understood that a paradigm shift was coming. The movements at Nasdaq were one thing; the advent of the networked world, which in which Apple played a major role as an innovator and SoftBank as an investor and part operator was another.
Apple, by then, was one of the world’s most valuable companies, with a suite of smash-hit products from Mac laptops to the iPod. Like Massa, Jobs was paranoid about stealing the ideas of his rivals. No Apple project was more secretive than the iPhone, the touchscreen smartphone that would sell billions and revolutionize personal communication.
By Massa’s account, on a visit to California sometime in the summer of 2005, he showed Jobs his sketch of a mobile-capable iPod that had a large display and used the Apple operating system. The new device, he predicted, would be able to process data and images. Jobs pooh-poohed the idea but couldn’t resist dropping hints about the iPhone.
Jobs: “Masa, don’t give me your crappy drawing. I have my own.”
Masa: “Well, I don’t have to give you my dirty paper, but when you have your product, give it to me for Japan.”
Jobs declined to divulge further details, but Massa saw a hint of a smile on the Apple boss’ face. After pressing him further, Massa held a follow-up meeting at Jobs’ Tudor-style country home in Palo Alto. At that meeting, Masa claims, Jobs agreed in principle to give SoftBank exclusive rights to distribute the iPhone in Japan. “Well, Massa, you’re crazy,” Jobs said. “We didn’t talk to anyone, but you came to see me earlier. I will give it to you.”
Nothing is written. There was no discussion of price or volume. A gentleman’s agreement only, based on the assumption that Masa would have the financial means to build or acquire a mobile phone business. “It was very secretive. I have never seen the product before it arrived in Japan [in 2008]” asserts Masa. “Steve never even told me a name.”
The story has a mythological quality. It believes Jobs gave his word three years before Apple launched the iPhone in Japan. Yet that promise may have given Massa the confidence to buy Vodafone Japan, the British-owned “V-Run” that used football icon David Beckham in its marketing campaign. It was a high-profile deal—the largest to date in Asia—but Massa gambled that he had a game-changing product in the pipeline. Whatever the precise chronology, Masa closed the distribution deal of the century, which enabled him to build a profitable consumer business in Japan, massively expanding the SoftBank brand.
On March 17, 2006, Masa struck a $17 billion deal to buy Vodafone Japan. Two weeks later, Jobs flew to Tokyo, where Massa challenged the Apple boss to uphold his end of the deal. “You didn’t give me anything in writing, but I made a $17 billion bet based on your word,” he said. “You should have felt better about a little responsibility.” Jobs laughed and said, “Masa, you are a crazy person. We will do what we have discussed.”