Yahoo Japan shares rose as much as 920,000 yen to 7 million. More than 500 shares traded so far, almost four times its daily six-month average. Yahoo Japan shares most recently traded up 820,000 yen, or 13 percent, at 6.90 million. Yahoo shares soared 10.5 percent in US trading yesterday.
Yahoo and its Japan unit rely heavily on online ad sales which are slowing in the US. Analysts say both companies need other sources of revenue. Last week, Yahoo said it expects online ad sales growth to slow as falling financial markets prevent other Internet companies from raising cash.
"Yahoo needs other revenue sources to compete against its rivals such as Microsoft's MSN and America Online," said UBS Warburg Japan Ltd analyst Kota Nakako. "It's possible Yahoo is in talks with major media companies, including Viacom."
Yesterday, Bear, Stearns & Co analyst Jeff Fieler said Yahoo shares rose on speculation that Viacom will buy Yahoo. Viacom owns the CBS television network, the Paramount Pictures film studio and cable networks including MTV and VH1.
Earlier this week, Yahoo Japan said parent pretax profit almost tripled as the Tokyo-based company sold more advertising to Japanese companies marketing themselves online, adding however ad revenue may fall in the near future.
Yahoo owns 32.6 percent of Yahoo Japan while Japan's Softbank Corp holds a 51.3 percent stake.
Two days ago, Yahoo Asia had said that it will not charge for premium services in Mail or Messenger although its US parent had earlier hinted that it might start charging consumers in search for additional revenues.
The company had also maintained that its auction services in Asia will continue to be free despite its decision to charge a fee for auction items listed on the US site.
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