Softbank Takes 20% Stake in Morningstar

Softbank Corp. of Japan said Thursday it paid $91 million in cash for 20% of Morningstar Inc., the Chicago-based mutual fund rating firm.

The investment is the latest by Softbank, an early shareholder in Yahoo Inc., as the Tokyo-based company assembles stakes in companies it believes will become more profitable by offering information and services over the Internet. The deal allows Morningstar to spend more on advertising, hire additional analysts and improve its online services.

“If you want to remain a major player in the financial information business, you’ve got to invest aggressively in the Internet,” said Don Phillips, Morningstar’s president. Closely held Morningstar has about 12,000 customers who pay $99 a year to get detailed information about mutual funds online, he said.

Meanwhile, Morgan Stanley Dean Witter & Co.’s co-head of investment banking for technology companies, Rex Golding, resigned to become a partner in Softbank Technology Ventures, a $600-million fund run by Softbank that invests in Web businesses.