TT-464 -- Web Business Snapshot, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, April 6, 2008 Issue No. 464

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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------------- Setting up an Office in 2008? ---------------

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-----------------------------------------------------------

+++ WHAT'S NEW

Japan's cyberspace businesses are alive and well, even
though last year's rise of the Social Network Service (SNS)
Mixi caused some realignment of the industry. According to
Netratings.co.jp, in February there were 47.768m users
online, looking at an average 1,730 web pages each. Other
stats indicate that blogging in particular is doing well,
and that currently out of the world's 112m blogs tracked by
Technorati, about 37% are in Japanese -- corresponding to
possibly 20m or so people producing them.

Well and truly at the top of the website heap is Yahoo
Japan, which in January reported net profit of JPY17.18bn
on sales of JPY70bn. Profit and sales were 13% and 29% up
over the same period a year earlier -- respectable results
for a company that reaches 88% of Japan's internet users.
2007 was a difficult year for Yahoo Japan, and it earned
lots of bad press as earnings growth stalled and investors
wondered if the company had lost its way. To their credit,
Yahoo Japan's management took on a sense of urgency and
started to announce a steady stream of tie-ups that might
lead to more revenue. In the last 12 months they have
launched an FX trading site, done a tie-up with old enemy
eBay, and started buying into a plethora of supporting
companies both in Japan and overseas.

[Continued below...]

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------------------ Offshore Development -------------------

[...Article continues]

Going back to Netratings, the top 10 properties in Japan
for February 2008 were in order:

Website (Users/Page Views)
==========================
Yahoo (41m/20.5bn)
Google (27m/2.9bn)
Rakuten (26m/4.1bn)
NTT Communications (24m/1.2bn)
Microsoft (22.8m/953m)
GMO (22.383m/1.1bn)
FC2 (20.937m/1.13bn)
Nifty (20.877m/682m)
Wikimedia (17.949m/402m)
Livedoor (17.929m/553m)

What we can glean from this snapshot is that Yahoo has 10
times the page views of anyone else, Mixi isn't in the top
10 yet, and that a company that has received very little
press coverage, FC2.com, has nearly tripled its user base
in the last 18 months to take 7th place.

In terms of companies with successful commercialization of
their websites, after Yahoo Japan and Google, the trio that
feature most frequently in the news are Mixi, DeNA, and
CyberAgent. Let's take a quick look at the performances of each.

Mixi:
Mixi has been a media darling ever since it took off
several years ago. Although it started out as a PC-oriented
site, last August more than 50% of users have coame from
its cell phone site and it is this segment which has
contributed the most growth over the last year. Through to
March 2008, Mixi's parent-only sales are expected to be
around JPY9.7bn, up a massive 85% on last year, and
an EBIT profit of JPY3.2bn, up 49%. Mixi's fixed line and
mobile SNS sites get 12.3bn PVs a month, from
approximately 12m members.

DeNA:
We wrote about DeNA's highly popular Mobage-town SNS for
cell phone users back in December 2006 in TT403
(http://www.japaninc.com/tt403). The company is saying it
expects to report JPY6.3bn net profit on sales of JPY29bn,
almost triple the profit and double the sales of 2007. The
company has about 9m members on its Mobage site, and gets
about 14bn PVs a month.

CyberAgent:
This company has an excellent online ad business, and
enjoyed sales of JPY76bn in FY2006, ending September 30th,
2007. Unfortunately, its profits are being pulled down by
the blogging business, which it doesn't seem to have
figured out how to monetize yet. On sales of JPY2bn, the
blogging division lost around JPY1.7bn due to the cost of
advertising and promotions. Currently CyberAgent is getting
3bn PVs for its blogs a month.

So how are these companies making their money? Online
advertising is still the mainstay, and the online ad spend
by Japanese business jumped 24.4% last year, to
JPY600.3bn. The fastest rising categories are search-linked
ads, up 37.8% to JPY128.2bn, and cell phone ads up 59.2% to
JPY62.1bn.

But as each company sees its user base get saturated with
ads, they are naturally branching out into collaborative
businesses -- the collaboration either being with other
service providers, real world companies, or with the users
themselves (i.e., SNS and comment-based content
aggregation). These include real estate broker sites,
shopping malls, auction services, travel, games, and a huge
variety of other entertainment.

*********

Closing this overview of how web companies are doing, we
thought we'd mention an interesting trend and a new
business that our related company, LINC Media, has become
involved in.

In late March, the Nikkei featured an article stating that
MORE people aged 60-79 years old use blogs than do users
aged 20-39 years. We found this rather surprising, and
this indicates where the major sites will turn after
they have saturated their youth markets -- especially now
that the Japanese government is going to prevent access to
many SNS sites for youths under 18 years old.

More by luck rather than good planning, LINC Media has
invested into an SNS site for oldsters, called
www.shashin-haiku.jp. This site allows retired people with
a lot of time on their hands and a penchant for travel and
high-end digital cameras to take photos, post them, then
match them up to haiku. To keep the quality level up, users
get to "borrow" haiku from famous author Morimura Seiichi.

The site was started in July of 2007 and although a niche
area, it has become popular because it provides users with
plenty of SNS and web tools so that they can concentrate
on their content rather than wondering how to get stuff
done. We've had a good run, and from zero have grown to
more than 1m PVs a month and 20,000 user sessions. Around
500 people are now maintaining their own pages and are
posting images and haiku like crazy. We get a new posting
every couple of minutes.

Maintaining a new website is not cheap, and a major
discussion internally is on how to commercialize the site.
CyberAgent's shacho reckons that you need around 3bn PVs a
month to make a site commercially viable. If you're
front loading a business with PR expenses, this is probably
true, however, in our experience, a site with more than 3m
PVs (just 10% of what CyberAgent reckons) and around
20,000 users is enough to start drawing advertisers -- so
long as you have a well defined audience that advertisers
can't easily or accurately reach through other means.

For www.shashin-haiku.jp, the first few advertisers have
already started signing up, but we know that we need to get
the page view volumes up. This will be done through some
emphasis on search engine optimization (SEO) and some free
PR gleaned from newspapers and magazines looking for
stories on retired people -- who of course are becoming an
increasingly important demographic in Japan. We are also
toying with Electronic Commerce, following in the footsteps
of the major players. The question is: what can we sell to
retired people that doesn't require lots of logistics and
customer support?

We'll let you know in 12 months time what we came up
with... :-)

...The information janitors/

***------------------------****-------------------------***

============= Back Office Support for SMEs ================

If you have a small 5-10 person office in Japan, chances
are that you are employing both an accountant and an HR
person. Chances are, too, that neither of them are working
at capacity.

LINC Media's BPO Division can help you bring your costs
down and improve head office reporting and interaction in
the process.

We already support many smaller foreign firms in Japan,
with a range of bilingual back office services, including
accounting, tax, HR, compliance, and even local
directorships.

Cost-effective, communicative, global standards. LINC Media
BPO. Contact us at: hanae.suzuki@lincmedia.co.jp, or call
(03) 3499-2399.
-----------------------------------------------------------

+++ NEWS

- Prefectures postpone budgets over tax mess
- Tokyo-to gasoline tax?
- Northwest fares increase
- Big quake to cause human traffic jam
- Lily extract inhibits wrinkles

-> Prefectures postpone budgets over tax mess

While the government is painting the lapse of gas taxes as
a calamity in terms of funding cuts for local governments,
the loss of these revenues may actually prove to be a
blessing in disguise, in that they will be proved to have
not been needed in the first place. Apparently the
temporary loss of JPY900bn (US$9bn) in tax revenue has
caused 36 prefectural governments around the nation to halt
road spending other than repairs and improvements, as well
as some other forms of construction spending. This is
expected to impact regional construction firms towards the
end of Q2 this year. ***Ed: We think that the reduced gas
prices will actually improve regional GDP by making
deliveries and other transport cheaper, as well as putting
a little more spending cash into the hands of consumers.**
(Source: TT commentary from nikkei.co.jp, Apr 5, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080405D04JFA06.htm

-> Tokyo-to gasoline tax?

Tokyo Governor Ishihara, always ready to drop a wrench into
things, has said that if the national gas tax is not
reinstated, "Tokyo-to" (the Tokyo Metropolitan Government)
may introduce its own gasoline tax. He said that the gas
tax cuts will cost Tokyo-to about JPY60bn in lost revenues
and he is exhorting other local governments to consider the
same measure. ***Ed: While we are not surprised that
Ishihara wants to rake in JPY60bn in new local road taxes,
given that he is responsible for losing almost the same
amount in the Shin-ginko scandal, this idea of local
governments taking over the levying of gas/road taxes is
not so bad. This makes the use of monies very specific and
very local -- and de-leverages central government wheeling
and dealing. It's just a shame that local governments in
this country haven't shown themselves to be any more mature
in eliminating wasteful spending and slush funds.**
(Source: TT commentary from nikkei.co.jp, Apr 5, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080405D04JFA07.htm

-> Northwest fares increase

It's an airlines operator's nightmare, full flights and yet
rising costs stripping out any chance to make profits.
Northwest Airlines has said that it will increase fuel
surcharges on routes between the USA and Japan (among other
countries) by another 10%, adding about US$160 to the basic
price of an air ticket. NWA has also introduced additional
surcharges for more than one bag per passenger, and for
bag weights over 50lbs (22.68kg). (Source: TT commentary
from bloggingstocks.com, Apr 4, 2008)

http://tinyurl.com/5q2ydh

-> Big quake to cause human traffic jam

A new study out from the Cabinet Office's Central Disaster
Prevention Council says that a major earthquake would not
only cause fires, death from collapsing buildings, and
other accidents, but that there would also be a wave of at
least 2m office workers trying to walk home and clogging
the streets of inner Tokyo at a critical time when
emergency services most need access. The study reckons that
6 or more people per square meter would be walking the
streets after a major quake, trying to get home because of
the public transport system being knocked out. The report
reckons that commuters in Chiba and Kawasaki would take up
to double the normal 7 hours to get home because of the
sheer mass of people on the move. ***Ed: The moral of this
story is: live close to town and in a modern or at least
safely situated building.** (Source: TT commentary from
rawstory.com, Apr 3, 2008)

http://tinyurl.com/66anjw

-> Lily extract inhibits wrinkles

Researchers at Utsunomiya University have discovered a
bibenzyl glycoside substance in an Indian lily plant that
is 16 times more effective in inhibiting tyrosinase
enzymes (which contribute to aging). Apparently anti-aging
cosmetics currently use kojic acid to inhibit tyrosinase,
but now that the researchers have synthesized the
lily-derived bibenzyl glycoside, it is expected that they
will quickly move to commercialize the product. ***Ed: Now
this is a product that investors are sure to flock to.**
(Source: TT commentary from nikkei.co.jp, Apr 4, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080403D03JSN04.htm

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan, as well as other
employers of bilinguals.

** HIGHLIGHTED POSITION(S)

Voice Integrations Engineer:

We are currently accepting applications for experienced
Voice Integration Engineers for an immediate opening at a
large multinational bank in Tokyo. This role includes
designing and implementing voice solutions based on
business requirements and global designs. This is a great
opportunity for candidates who have experience using PBX &
IPC systems and call center standards such as Avaya, CSM
& IVR.

Network infrastructure engineers who understand the
Japanese telecommunications market and security standards
for voice integration systems in the financial industry are
strongly encouraged to apply.

The ideal candidate will be fluent in English and capable
of basic communication in Japanese.

Annual Salary starts at JPY 7.0m and is negotiable for the
right candidate.

** POSITIONS VACANT

- CRM Software Support Manager JPY8m–JPY10m
- CRM Software Developer JPY6m–JPY9m
- Data Center Operators starting between JPY5m–JPY8m
- Security Infrastructure Administrator (Okinawa) – Neg.
- 1st and 2nd Level Helpdesk Technician – JPY3.5-JPY5m

Interested companies may e-mail resumes to:
terrie.lloyd@lincjapan.net
-----------------------------------------------------------

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------- Marcus Evans Events - Supported by J@pan Inc ------

- Customer Relationship Excellence
15th - 16th April 2008, Hilton Tokyo
http://www.marcusevans.com/html/eventdetail.asp?eventID=13548
This event features leading speakers from Daihatsu Motor,
Daimler Japan, General Motors, Honda Motor, Nissan Motor,
Mitsubishi Motors, Toyota Motor and Johnson Controls
Automotive Systems Corporation. Don't miss this out!

- Compensation and Benefits
27th - 28th May, Tokyo
This event provides Japanese firms the understanding and
'how-to' of investing in their employees for the purpose
of sustaining their businesses Corporations nowadays need
to formulate a business-driven compensation policy that
leverages human capital to drive corporate growth.

'J@pan Inc readers are entitled to a 10% discount upon
registration with Ms. Esther Wong.'

For further details and brochures, please contact:
Ms. Esther Wong
Tel No: +603 2723 6736
Fax No: +603 2723 6699
Email add: estherw@marcusevanskl.com
-----------------------------------------------------------

-------------- YMCA/FCSC 2008 Charity Concert -------------

In support of the YMCA's Challenged Children Project (CCP),
the YMCA's Foreign Community Support Committee (FCSC) will
hold their annual Charity Concert on the evening of April 9,
2008 starting from 18:30 hosted by FCSC Honorary Chairman,
His Excellency Ambassador Jaromir Novotny, at the Embassy
of the Czech Republic in Hiroo.

Featuring two performers: Chan Chan (Latin & Cuban Rhythms)
and Hideki Ikegami (Marimba Percussionist).

Donation is JPY10,000 and all proceeds go to benefit the
CCP. Beverages and canapes will be served during the
intermission.

Attendance is limited so please contact the FCSC office;
03-5367-6640, fcsc@ymcajapan.org
for tickets and more information.

Performances of Hideki Ikegami can be seen on YouTube:
http://www.youtube.com/watch?v=yPeufQ_slZY
-----------------------------------------------------------

------------ Entrepreneur Association of Tokyo ------------

Title: Vision to Venture -- 'From Consulting in Hi-Tech to
Entrepreneur in Entertainment'

Speakers: Shinichiro Ishikawa, President & CEO of GDH Group

Don't miss this opportunity to hear Shinichiro Ishikawa
talk about the entrepreneurial adventure of forming GDH,
a global organization that provides leading content for
traditional media and next generation platforms.

GDH serves as the umbrella organization for a number of
leading animation and online game companies worldwide with
offices/subsidiaries in Tokyo, LA, London, Paris, Seoul,
Kuala Lumpur, Taipei, and Shanghai.

Date/Time: Monday, April 7th, 7:00 pm
Location: Foreign Correspondents' Club of Japan
Language: English
Website: http://www.ea-tokyo.com
-----------------------------------------------------------
______________________________________________________
Events announcements are priced at JPY50,000 per week.
For more information, contact sales at japaninc.com

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

-> No feedback this week.

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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