CNBC Transcript: Softbank CEO & Alibaba Director Masayoshi Son Speaks with CNBC's "Squawk on the Street" Today
Following is the unofficial transcript of a CNBC interview with Masayoshi Son, SoftBank CEO & Alibaba Director, today on CNBC's "Squawk on the Street." Following is a link to the interview from CNBC.com: http://video.cnbc.com/gallery/?video=3000312307.
All references must be sourced to CNBC.
DAVID FABER: YOU NEVER KNOW WHO YOU ARE GOING TO FIND ON THE FLOOR OF THE NEW YORK STOCK EXCHANGE. I WAS ABLE TO FIND MASAYOSHI SON WELL SOFTBANK IS THE LARGEST SINGLE OWNER OF SHARES IN ALIBABA CHAIRMAN AND CEO OF SOFT BANK. SO NICE OF YOU TO JOIN US ON A BIG DAY HERE. YOU OWN 32.4% OF ALIBABA AFTER THIS OFFERING. YOU DID NOT SELL A SHARE AT SOFT BANK. WHY NOT SELL A SHARE?
MASAYOSHI SON: BECAUSE THIS IS NOT THE END. THIS IS THE BEGINNING. THIS IS THE BEGINNING OF ALIBABA.
FABER: THAT IS A SIGNIFICANT STAKE OF COURSE WELL AT LEAST 60 BILLION DOLLARS PERHAPS BY THE END OF TODAY. WHAT DO YOU DO WITH IT? DO YOU USE IT IN OTHER WAYS TO HELP FORTIFY YOUR OWN BUSINESS IN SOFT BANK?
SON: WE HAVE LOTS OF IDEAS, LOTS OF DREAMS. ALIBABA IS ALIBABA. WE ARE GOING TO KEEP ON, YOU KNOW, HAVING ALIBABA AS OUR CORE COMPANY IN OUR FAMILY.
FABER: WOULD YOU LIKE TO OWN MORE, IF COULD YOU?
SON: OF COURSE.
FABER: IS THAT POSSIBLE OR NOT LIKELY.
SON: ANYTHING IS POSSIBLE BUT WE ARE HAPPY THE WAY IT IS.
FABER: NOW IT IS A PUBLIC COMPANY AND YOU OF COURSE ARE A DIRECTOR OF THIS COMPANY. WE ASKED JACK MA EARLIER WHO ALWAYS HAS SAID SHAREHOLDERS ARE NUMBER THREE.
SON: OF COURSE
FABER: HOW DOES THE COMPANY CHANGE NOW THAT IT IS A GLOBALLY PUBLIC AND PERHAPS AS MUCH AS A $200 BILLION COMPANY PERHAPS IF WE HIT $80 SOME ODD DOLLARS A SHARE TODAY?
SON: IT HAS LOTS OF NEW SHAREHOLDERS, WHICH WILL BE NICE. THOSE SHAREHOLDERS WILL BE PARTNER FOR ALIBABA GOING FORWARD AS A NEW PARTNER. IT'S JACK AND OUR PHILOSOPHY TO TREAT THE CUSTOMERS THE FIRST. BECAUSE THEY ARE THE MOST IMPORTANT PEOPLE THAT WE HAVE TO TAKE CARE. THEN THE EMPLOYEES. OF COURSE, THE SHAREHOLDERS SHOULD BE THE THIRD, BUT HAVING CUSTOMERS TAKE CARE MOSTLY IMPORTANTLY, ACTUALLY SHAREHOLDERS GET THE BENEFIT. I THINK IT DOES NOT CONTRADICT. IT IS ACTUALLY A GOOD THING.
CRAMER: SIR, THERE ARE PEOPLE WHO ARE TELLING ME, YOU ARE SALUTING THIS COMPANY BUT THIS IS ALL GOING TO BE A FLASH IN THE PAN. THIS IS THE TOP. THIS IS ABOUT AS GOOD AS IT'S GOING TO GET. THIS IS A SKEPTICAL VIEW, SOME WOULD SAY A CYNICAL VIEW. HOW DO YOU RESPOND TO THE IDEA THAT THIS IS WHAT FEELS LIKE TOO GOOD TO BE TRUE AND IS PROBABLY THE END RATHER THAN THE BEGINNING?
SON: PEOPLE CAN HAVE A DIFFERENT POINT OF VIEW. MY POINT OF VIEW IS THIS IS TRUE BEGINNING OF ALIBABA. I THINK THE INFORMATION REVOLUTION IS JUST THE BEGINNING.
IT'S GOING TO LAST NEXT HUNDRED YEARS, 200 YEARS. CHINA IS STILL GOING TO GROW. PENETRATION IS LOW. THE E-COMMERCE IS GOING TO GROW. I'M VERY, VERY OPTIMISTIC.
QUINTANILLA: PEOPLE SAY IF YOU WANT TO OWN MORE ALIBABA YOU CAN JUST BUY YAHOO AND THEN YOU WOULD OWN ALMOST HALF.
SON: I SHOULD BE CAREFUL HOW TO MAKE A COMMENT
QUINTANILLA: DO YOU BELIEVE, PEOPLE TALK ABOUT THE CHINESE CONSUMER BEING, OBVIOUSLY, GROWING AND MIGRATING TO THE WEB, BUT STILL HAVING MUCH LOWER PER CAPITA INCOME, RIGHT? THE CONSUMPTION ECONOMY IS JUST NOT THERE YET. WHEN IS THAT GOING TO CHANGE?
SON: EVERY DAY. IT'S GROWING AND CHANGING. I'M VERY OPTIMISTIC ABOUT THAT.
FABER: ALSO TO THE EXTENT THAT PEOPLE, AGAIN, DO EQUATE THE OFFERING HERE WITH THE GROWING SPECULATION IN THE MARKET AND A BUBBLE MENTALITY, FAIR OR NOT, YOU'VE SEEN THEM ALL. YOU AND I SPOKE. WHEN YOU WERE BRIEFLY THE RICHEST MAN IN THE WORLD AT ONE POINT.
SON: THE YEAR 2000 I WAS THE RICHEST FOR THREE DAYS. SO I KNOW UP AND DOWN.
FABER: RIGHT. AND SO I DO WONDER GIVEN THE PORTFOLIO OF COMPANIES YOU HAVE AT SOFTBANK AND THE INSIGHT YOU HAVE HAVING SEEN THE UPS AND DOWNS, WHERE ARE WE RIGHT NOW? PUT ALIBABA IN THAT PERSPECTIVE FOR ME.
SON: BACK IN THE YEAR 2000, MOST OF THE INTERNET COMPANIES WERE NOT MAKING ANY MONEY. ALIBABA IS ALREADY MAKING A LOT OF MONEY. AND IT IS GROWING SO I DON'T THINK IT IS COMPARABLE
CRAMER: SPEAKING OF COMPANIES THAT ARE NOT MAKING THAT MUCH MONEY SPRINT THEY COULD USE, 30 BILLION DOLLARS, HALF THE WEALTH WOULD I THINK PRETTY MUCH GET THEM ON EVEN FOOTING WITH A VERIZON AND AT&T. MANY OF THE PEOPLE WHO WATCH OUR PROGRAM OWN SHARES IN SPRINT. IT SEEMS LIKE SO MUCH MONEY NEEDS TO BE INVESTED THAT THE COMMON STOCK ITSELF MAY NOT REPRESENT A CALL ON ALL THE THINGS THAT HAVE TO BE DONE.
SON: FOR THOSE KIND OF QUESTIONS, I HAVE TO BE CAREFUL HOW TO SAY. SPRINT WHO IS A NEW CEO COMING, THE COMPANY IS CHANGING QUITE A BIT. I AM VERY OPTIMISTIC ABOUT THAT.
FABER: YOU ARE. I INTERVIEWED MR. CLAURE LAST WEEK. AND WE TALKED ABOUT HIS INITIATIVES OF COURSE AND THE VALUE PROPOSITION HE IS TRYING TO BRING CONSUMERS. BUT YOU HAD ALSO FAMOUSLY TOLD ME IN THE PAST IT'S NOT GOING TO BE EASY, ESPECIALLY WITHOUT T-MOBILE OR WITHOUT A PARTNER OF SOME KIND AND GETTING SCALE IS WHAT YOU SAID TO BE FAIR. IT IS NOT GOING TO BE EASY. I WOULD THINK THAT IS STILL THE CASE.
SON: WELL, IT'S A LONG BATTLE. BUT I AM STILL VERY OPTIMISTIC AND HOPEFUL THAT WE ARE GOING TO GO FOR THAT. AND MARCELLO IS A GREAT CEO. HE IS A FIGHTER, HE IS A CHALLENGER. HE LOVES TO BE IN THE SITUATION OF FIGHTING FROM UNDERDOG. HIS WHOLE LIFE IS LIKE THAT. MY WHOLE LIFE IS LIKE THAT. SO I THINK IT'S AN INTERESTING MOMENT TO WATCH.
FABER: DO YOU STILL THINK SPRINT NEEDS MORE SCALE IF IT ISN'T T-MOBILE, IS THERE SOMETHING ELSE PERHAPS? SOME SORT OF PARTNERSHIP WITH THE DISH FOR EXAMPLE THAT WOULD GAIN IT A LOT OF SPECTRUM. ARE THESE THINGS THAT YOU THINK ABOUT AS POSSIBILITIES?
SON: WELL, I SHOULD BE CAREFUL ON THAT KIND OF QUESTION.
QUINTANILLA: LET ME TAKE YOU BACK TO ALIBABA. AS THEY DEPLOY CASH AND INVEST, IS THAT BALANCE GOING TO BE MORE CHINA OR EX-CHINA IN YOUR VIEW?
SON: WELL IN MY VIEW, ALIBABA HAS STILL LOTS OF GROWTH OPPORTUNITY INSIDE CHINA. SO THAT IS A BASIC. IT'S GOING TO GROW. BUT THE OVERSEAS IS ANOTHER, YET ANOTHER BIG HORIZON OF OPPORTUNITIES. SO I AM VERY EXCITED. THIS IPO WILL GIVE LOTS OF NEW OPPORTUNITIES FOR EXPANSION GLOBALLY.
FABER: AS A DIRECTOR OF THIS COMPANY AND HAVING SPOKEN TO JACK MA, WHO AT LEAST INDICATED THAT BEING 50 YEARS OLD AND BECOMING AS WEALTHY AS HE HAS GIVES HIM A DIFFERENT PERSPECTIVE. I WONDER WHAT IS YOUR VIEW OF THE MANAGEMENT? DO YOU NEED TO REPLENISH YOUR TOP RANKS? ARE YOU HAPPY WITH THE MANAGEMENT AT THE COMPANY THAT YOU CURRENTLY HAVE?
SON: I AM VERY HAPPY WITH THE MANAGEMENT. THEY HAVE LOTS OF PASSION AND ENERGY. IT'S NOT SLOWING DOWN AT ALL. SO I AM VERY CONFIDENT THAT THEY ARE GOING TO KEEP ON FIGHTING FOR THE FUTURE.
FABER: AND WHEN THE RICHEST MAN IN JAPAN TALKS TO THE RICHEST MAN IN CHINA, WHAT DO YOU GUYS TALK ABOUT?
SON: MONEY IS JUST ONE MEASUREMENT. IT'S NOT THE GOAL. IT IS JUST NICE TO HAVE, BUT IT IS NOT THE MOST IMPORTANT THING. IT IS THE PASSION TO MAKE THE CUSTOMER HAPPY, TO SEE THE BIG SMILE OF THE PEOPLE. THAT'S THE NICEST THING.
CRAMER: WHERE ARE WE INTERNATIONALLY? OUR PRESIDENT HAS BEEN SAYING WE WILL DEFEND JAPAN AGAINST CHINA, RUSSIA, UKRAINE, EUROPE. SLOWING DOWN. CHINA, WE CAN ALL TALK ABOUT HOW GREAT THE CONSUMER IS, BUT WE SEE SLOWDOWN. JAPAN. JUST NOT GROWING AT ALL. WHERE DO YOU SEE THE WORLD?
SON: JAPAN HAS BEEN STRUGGLING FOR THE LAST 20 YEARS, BUT I'M HOPEFUL THAT THERE IS NEW CHANGES THAT'S HAPPENING. I DON'T KNOW ANY COUNTRY HAS ANY FUTURE OF CHANGES. BUT I'M VERY HOPEFUL THAT NEW CHANGES WILL COME.
FABER: DO YOU WORRY AT ALL ABOUT CHINA/U.S. RELATIONS IN PARTICULAR TO ALIBABA AND HOW THAT COULD CONCEIVABLY IMPACT THE SUCCESS OF THE COMPANY?
SON: WELL ANY COUNTRY HAS ALL KINDS OF POLITICAL SITUATIONS. BUT WE AS BUSINESS PEOPLE, SEE THE CUSTOMER ALL OVER THE WORLD. AND INTERNET IS NOW TAKING ALL OF THE BORDERS AWAY. WE LOVE THE TECHNOLOGY. TECHNOLOGY TAKES THE BORDERS AWAY. IN OUR BUSINESS, POLITICS IS NOT THE MOST IMPORTANT PARAMETER.
CRAMER: DO WE MAKE A LARGER LESSON HERE? I SEE A LOT OF PEOPLE TELLING ME TO ASK YOU, IS THIS CHINA ECLIPSING UNITED STATES? IS THIS A STATEMENT ABOUT WE ARE A GREAT MERCHANT COUNTRY, BUT YOU KNOW WHAT? ANOTHER COUNTRY HAS COME IN AND LEAPFROGGED US BOTH IN TERMS OF THE WAY WE TREAT THE CUSTOMER AND IN THE ACTUAL WHOLESALE RETAIL MODEL. IS THE UNITED STATES, IN YOUR VIEW, PEAKING VERSUS CHINA?
SON: UNITED STATES IS STILL GROWING. I THINK THE POPULATION OF THE UNITED STATES IS GROWING. IT STILL HAS LOTS OF PASSION AND ENERGY. AND IT IS THE CENTER OF TECHNOLOGY. I LOVE, I RESPECT SILICON VALLEY, NEW YORK, ALL THE OTHER CITIES WITH YOUNG ENTREPRENEURS COMING UP WITH CRAZY AND GREAT IDEAS. SO I'M VERY HOPEFUL. I'M VERY CONFIDENT THAT THE U.S. WILL STILL CONTINUE TO GROW.
QUINTANILLA: ALTHOUGH YOU'VE BEEN CRITICAL OF THE PAST OF OUR NETWORK INFRASTRUCTURE THAT ANTIQUATED, GIVEN THE SIZE OF OUR COUNTRY AND OUR RESOURCES.
SON: THAT IS STILL TRUE.
QUINTANILLA: THAT HAS NOT CHANGED?
SON: WELL, IT NEEDS TO CHANGE. NEEDS TO CHANGE. BUT WE ARE NOW PART OF THE PLAYER. SO WE TAKE THE RESPONSIBILITY. I TAKE ALL THE CRITICISM. SO WE ARE ONE OF THE MEMBERS WHO HAVE TO DELIVER A BETTER NETWORK FOR THE UNITED STATES.
FABER: FINALLY, MASA SON, JAPAN. YOUR HOME MARKET, YAHOO JAPAN, OF COURSE, STILL AN IMPORTANT ASSET FOR SOFTBANK. FAMOUSLY VERY SUCCESSFUL. WHAT ARE YOU SEEING IN YAHOO JAPAN AND OVERALL IN TERMS OF JAPAN WHERE THERE IS A GREAT DEAL OF CONCERN STILL ABOUT HUGE BUDGET DEFICITS AND THE STATE OF THE CONSUMER?
SON: WELL, INTERNET IN JAPAN IS ALSO GROWING. AND MOBILE IS ALL BECOMING SMARTPHONES. SO THE AVERAGE JAPAN STILL HAS LOTS OF OPPORTUNITY AND IT IS JUST ONE EXAMPLE. BUT MANY OTHER YOUNG INTERNET COMPANIES ARE HAVING GREAT SUCCESS. SO THAT IS ONE ANGLE JAPAN CAN REVIVE.
FABER: MASAYOSHI SON, THANK YOU SO MUCH FOR COMING UP AND HAVING A CONVERSATION. VERY MUCH APPRECIATE IT.
SON: YEAH.
FABER: MASAYOSHI SON, OF COURSE, CHAIRMAN AND CEO OF SOFTBANK AND, SOFTBANK, THE LARGEST SINGLE OWNER OF ALIBABA SHARES. 32.4 PERCENT, I BELIEVE. FULLY DILUTED AT THE END OF TODAY. THANK YOU, SIR.
SON: THANK YOU VERY MUCH.
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