Can Google Make it in Japan?

In a Yahoo! dominated marketplace Google has its work cut out

By Natasha Thompson, Researcher for J@pan Inc

According to whatis.com, a search engine is a coordinated set of programs that uses a spider, or 'a bot', to search and read every page on a website, creates a huge index, or database, of information from web pages, process search requests, and returns results to you. In other words, when you are 'searching' the Web using a search engine, you are not searching the Web at all, instead you are reading information that has been gathered on its huge database.

The Open Directory Project listed over 370 search engines in 1991. Which one has the largest number of users worldwide currently? Microsoft rules the world of search. Google Inc trails behind but is slightly ahead of Yahoo! says Nielsen/Net Ratings' (a US internet media and market research company), who compiled a list of top ten web sites by its parent company in December 2006. Microsoft has 120.9million visitors, Google Inc has 112.2million and then slightly behind is Yahoo! with 111.2million.

Is the picture the same in Japan? A survey conducted by NetRatings Japan last year, showed that ‘Yahoo! Japan’ attracted about 35million users per month, while ‘Google Japan’ had approximately 14million users. This implies that Japan is a market that Google needs to conquer. The thirdlargest group of Google search engine users in the world following English and German-speaking customers are Japanese.

Google gears up

Google went live in late 1998. Founders and fellow Stanford computer science students at the time, Sergey Brin and Larry Page, raised an initial $1m from family, friends and angel investors. Four years later, Google Inc established a subsidiary in Tokyo, its fourth business operation outside of the US. Many staff members of Google Japan have a strong background in the Internet industry and advertising including its president, Norio Murakami. Murakami brings extensive knowledge to the team. He got his start at Hitachi Electronics K.K. in the 1970s as a system engineer for mini-computer systems. Throughout his career he's been responsible for launching Japanese subsidiaries, arranging successful mergers and managing marketing divisions.

Considering the increasing significance of overseas markets to the company's revenue, Google Tokyo Research & Development Center has been added to the Google empire. This is the third R&D center outside of the US. The center is to help blend Japan's advanced technology in broadband and mobile phone services into its corporate activities. The engineers at the center work with Google staff at the headquarters in California to develop products and services tailored for the Japanese market. High on the list of priorities is the desire to enhance the computer processing technology in Japan and to produce the best search results for its users.

The rivalry heats up

President Murakami and the R&D center are in the midst of exciting changes in the Internet industry. A survey of the popularity of search engines by Internet.com and Goo Research, this month, shows Google slightly ahead of ‘Yahoo! Japan’. About half of those surveyed associated Google with search engines (48.66%) and ‘Yahoo! Japan’ is viewed more as a portal site rather than a search engine (41.83%). In February 2006, a similar survey was conducted. The participants were asked when it comes to a portal site which one do you think of? Results revealed 59.27% of the participants said ‘Yahoo! Japan’ and 30.6% said Google.

Does Google's popularity reflect its user base in Japan?Does Google's popularity reflect its user base in Japan?

One can infer that ‘Yahoo! Japan’ is drawing more and more users to its site. Users are finding a pathway to other information or retrieving information to their key word searches at ‘Yahoo! Japan’. Google Japan, on the other hand, is attracting more users to their search engine than any of its rivals. However, users are less likely to use the site as a portal or path to other information.

The rival's competitive edge

Masahiro Inoue, president of ‘Yahoo! Japan’, said that their proprietary robottype search engine, developed jointly with US Yahoo! and introduced in May 2004, has enhanced the performance of the search engine service in Japan and allowed it to capture more of the market. Nevertheless, ‘Yahoo! Japan’ personalizes its search results by designating 'surfers', who are staff members, seeking to register websites on the Internet every day. After the sites have been registered, they are put into categories such as ‘Entertainment’ and ‘Media and News’. Users can access these sites with ease by simply clicking on the category. Moreover, the average number of words used for searches on the ‘Yahoo! Japan’ site is 1.3 to 1.4 compared with 2 or more words at Google Japan.

On a visit to Japan to mark the 10th anniversary of ‘Yahoo! Japan’, Jerry Yang, co-founder of ‘Yahoo! Inc’ stated that Yahoo's vision for the next decade is to become a social media-driven company. In other words, a company working to pursue opportunities, to leverage the interests of their user base and the relationships between users to provide more user-generated content.

‘Yahoo! Japan’ has already implemented plans to develop into a social media-driven company. It has released a beta version of Yahoo 360, an online social networking service for its members. It's possible that the service could include online auctions where only Yahoo 360 friends are eligible to bid.

Google thinks outside the box

Google Japan is taking measures to cut ‘Yahoo! Japan's’ lead. Its engineers are tackling keyword searches. In cases where one or two keywords are entered in the search box, the search engine will suggest other search methods; such as add other keywords or try image retrieval. The search engine will allow the user to personalize the search by offering the choice to rank the type of files to appear in the search results. For those users who view image files often, it will be possible to have image files appear higher up in the search results.

Google Japan has been offering services to involve users more. It has partnered with Hatena, a blog service provider in Tokyo, to allow Hatena's users to register their favorite websites on Google Japan and see them on their own personalized web pages. Google's search functions give information to the users about the popularity of the web pages. In addition, Google Japan is experimenting with a new service based on the free word processing software available on the Google.com website. Google Japan is also considering launching an online service here to allow the placement of ads in major national newspapers to attract more users. Google Inc will complete a threemonth free trial of a similar service mid-February. The results will be analyzed carefully before making the service available to the Japanese market. A major concern for the Google Japan team is the long relationship advertising agencies have had with them. Advertising agencies have a large market share of the advertising industry. Last July, Google Inc and KDDI partnered to provide KDDI's EZ web menu with Google's search function. Subscribers can access authorized 'official' sites as well as their unofficial ones too. Cell phone and unofficial sites operators will have a new source of income for Google's search-linked advertising business model.

What does the future hold for Google in light of the rivalry in the search engine industry? It's quite likely to produce more change and innovation. Larry Page, in an interview with ABC News said, "We have a mantra: 'Don't be evil', which is to do the best things we know how for our users, for our customers, for everyone."

This writer hopes that this means the minimalist website design stays. JI

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Comments

WORTHLESS.

Ok, so when was this written? You might as well not even post this information on the web if you're not going to include a date at the top. It's a waste of everyone's time.

This article was published in the Spring 2007 edition of J@pan Inc magazine. If you look, at the top of the article you will see a blue link with the text "Magazine No.71": click on this and the date and details of the magazine of which the article was a part will appear. We apologize for any confusion and will look into clarifying our chronological indication processes.

JIC

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