TT-572 -- Restaurant Listings Wars, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, July 4, 2010 Issue No. 572


- What's New
- News
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback
- News Credits

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The other day we were in discussing with a major Japanese
paper publisher the changing dynamics of the market. As
publishers ourselves, we are more than interested in what
is going on, and how to mix and match paper with the web
and mobile. The major Japanese firm's representative was
concerned that online competitors were taking over a big
piece of their audience, and since the competitors provide
most of the content for free, there was little or no way
for this paper publisher to compete.

In fact, this is the same problem confronting almost all
paper publishers today. Just last week, the Times
newspaper of the UK made a decision that may seal its
fate, by deciding to put up a pay wall for all content.
This would be fine if the Times were the only place to get
that content, but the same news is available all over the
web thanks to the ubiquitous reach of news feeds such as
Bloomberg, Reuters, AP, and others, and of course the
republishing of that news over Google. In any event, the
Times first step towards a pay wall has been to require
visitors to register -- and as a result traffic to the site
has fallen by 60%. Once the charging starts, traffic could
become quite microscopic...

Perhaps they should be looking at what is being done in
Japan, where user-pays content is big on the cell phone
and increasingly so on PCs as well.

One segment that is good to look at is Internet providers
of information on eating out. This sector is highly
competitive because for many Japanese, going out to eat
and drink with friends is their primary form of adult
recreation and they continue to do it even though there is
a (consumer) recession going on. They're just being more
frugal about it these days and the information providers
are taking advantage of this fact.

[Continued below...]

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[...Article continues]

In the "old days", say about 10 years ago ;-), the best way
to find out about good places to eat out was from free
papers or women's magazines. Then in 2002 seemingly out of
nowhere came a new search site called "Guru Navi", formally
Gourmet Navigator in English. The site had picked up a
large number of restaurants, was always up-to-date, and
most importantly was available over cell phones. That meant
that without even having to plan ahead, users could check
the neighborhood they were in and see if the target
restaurant was open.

All went well from that year, and Guru Navi became a
sensation, being ranked the Number One lifestyle
information web site for the Yahoo! Internet Guide in 2002.
The company started doing deals with everyone from Nikkei
Woman magazine to the Japan Tourism Agency, and became
widely followed and used, to the extent that by April this
year (2010) there were 6.96m registered users creating 20m
unique user sessions and generating 840 million page views
per month. That's a lot of page views.

Further, during FY2009 ending March 2010, the company was
able to announce that net sales had increased 20.8% to
JPY24bn, the third consecutive year of increase, and that
operating income was up 16.1% to JPY4.5bn with
corresponding net income up 2.9% to JPY2.3bn. The pre-tax
number would have been higher, but the firm will shortly
be relocating to spiffier offices and incurred a large cost
in the process. Pretty decent numbers you might think.
However, and perhaps surprisingly the company's share price
has tanked by about 40% this year. Why?

The answer is a newer competing website, Tabelog -- a
foodies' blogging site on steroids, which is produced by
another web company called

The problem for Guru Navi is that they primarily make money
out of banner and feature ads and off-line services to
member companies. This means that the relationship between
Guru Navi and its restaurant clients drive the site -- rather than
the readers, causing information to be sometimes of
questionable quality and preventing aggressive marketing by
one restaurant against another (i.e., no comparison shopping).

Tabelog on the other hand is customer driven, starting as a
blog where users could rate particular restaurants, so the
content is much "socialized" and may be more accurate as
well... Restaurants wanting to advertise on Tabelog have to
accept that it's user driven and therefore, are more interested
in being proactive on the site, especially when the users
have given them a reputation to protect. For example, they
can put paid ads on pages belonging to their competitors.
At the same time, the quality of information means that
Tabelog can repurpose this content as popularity lists --
something that it appears it can get consumers to pay for. reckons that it is making JPY5,000-JPY10,000 per
restaurant for 6,700 paying restaurants -- or about JPY40m a
month in fees. The company has a target to hit 20,000
restaurants by the end of FY2010, and if it keeps up this
pace, possibly hit Guru Navi's 50K number of restaurants in
the next couple of years -- although probably not that many.
Because just as the higher quality establishments are
jumping in to sign up, the lower quality ones won't be able
to make any ranking headway and therefore won't be
motivated to join. No matter, they can stay with Guru Navi.

Given that Tabelog is 50% to 70% cheaper than Guru Navi for
a restaurant, and that only the best restaurants really
want to be on the site, it seems pretty certain that Guru
Navi is going to have to change its system. Problem is,
as mentioned, not every restaurant is of 3-star
or 4-star quality and Guru Navi would have to disappoint
or even alienate such clients if it moved to a Tabelog
type format.

This Catch-22 is interesting, because in a way, it's the
same situation facing paper publishers who are debating
about whether to make a go of it on the Internet. If they
put their information up for free, they will cannibalize
their customer base on paper. And if most of their audience
does go online because of the free content, the ability to
charge advertisers will drop dramatically, because ads on
the Internet pay less than paper ads do.

Anyway, in Guru Navi's case, they don't have the paper
problem, but they are going to have to figure out how to
break the commercial ties they have with many of their
clients so that they can democratize their content and make
it competitive with Tabelog's. That should be interesting
to watch over the next few months.

...The information janitors/


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+++ NEWS

- New Chinese tourists may spend less
- Unemployment up, consumer spending down
- SMFG, Barclays team up for private banking
- How many high-paid corporate directors?
- Olympus buys X-ray image analysis company in US

-> New Chinese tourists may spend less

A researcher at the Mitsubishi Research Institute is
pouring cold water on the idea that the loosened visa
regulations for Chinese tourists will increase spending
here in Japan. According to the MRI spokesperson, Chinese
tourists have so far been spending an average JPY130,000
per person here and are at the top of the earnings pyramid
in that country. In contrast, the new influx of tourists
will have a lower annual income and are expected to be a
lot more frugal. There is a general consensus that total
numbers of tourists will increase significantly, though,
potentially hitting 1.8m people in FY2010, up 80% from
FY2009. (Source: TT commentary from, Jul 3, 2010)

-> Unemployment up, consumer spending down

The most recent Tankan survey may have shown that Japan's
big companies are feeling more bullish about the future,
but its consumers definitely are not. Government figures
show that the nation's unemployment rate rose in May to
5.2%, up more than 0.2% from what was expected. Also, the
average monthly spending by households fell 0.7% in May
compared to the same period last year. Economists were
expecting a 0.5% rise. ***Ed: FYI, monthly household income
in May was JPY421,413, down 2.4% over last year, and
consumption was JPY280,714.** (Source: TT commentary from, Jun 28, 2010)

-> SMFG, Barclays team up for private banking

The Sumitomo Mitsui Financial Group (SMFG) and the UK's
Barclays have announced that they will team up to start a
private banking business in Japan. The companies will
create a joint venture to be named the SMBC Barclays Wealth
Division, and will target individuals with at least JPY500m
of assets. Also involved will be Nikko Cordial Securities,
which is now owned by SMFG. ($1=88.54 Yen) (Source: TT
commentary from, Jul 1, 2010)

-> How many high-paid corporate directors?

Following on from our story several weeks ago about a
change in the law for reporting the salaries of public
company executives receiving compensation of more than
JPY100m/year, most companies have now made such reports.
Interestingly, of Japan's 3,813 listed firms, only 300
people had incomes reported of more than JPY100m. This is
in stark contrast to the USA where the average CEO pay at
the 3,000 largest companies last year was a whopping
US$3.5m. Accounting firm PWC reckons that the average
salary for CEOs in Japan was just JPY63.8m. ***Ed: So it
appears that Japan really is more egalitarian -- at least
in pay rankings.** (Source: TT commentary from, Jul 1, 2010)

-> Olympus buys X-ray image analysis company in US

Japanese M&A activity abroad rolls on. The latest
announcement is that medical and optics maker Olympus
Corp. has bought 100% of a US X-ray image analysis firm
called Innov-X Systems. Olympus apparently paid US$77.5m
for the company, which had sales of US$40m in FY2009.
***Ed: Another high price paid for what seems to be a good
quality company. When you realize the cheap cost of money
here in Japan, highly credit worthy firms here can easily
amortize their purchases over 5-7 years verus 3 years for
anywhere else in the world, and thus appear to pay a higher
than normal price -- winning over shareholders in the
target company with minimum fuss and muss.** (Source: TT
commentary from, Jul 3, 2010)

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.


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=> BiOS, a Division of the LINC Media group, is actively
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or expanding in Japan, as well as other employers of


BiOS is currently looking for a Software and Peripherals
Vendor Business Manager, for an exciting opportunity to
expand your product, business management expertise and
take a leadership position. This is a highly dynamic role
where you will have the opportunity to work with talented
people across the various departments at a highly visible
Global vendor, and be highly influential in delivering
the optimal business result for the client. This job would
be well suited to either a System Consultant or a Solutions
Architect looking to expand their career in production and
business management.

Your key responsibilities will be driving and delivering on
the APC Business result, driving effective sales engagement
while managing related product lines. This is a challenging
and rewarding role, requiring an in-depth ability to assess
and manage the project portfolio. As you will be required
to operate with a minimum of supervision and liaise on a
regular basis with project stake holders and executive
managers, a high level of responsibility in your previous
roles is a must, as are excellent communication skills and
an eye for detail. This is a challenging step up for an
experienced professional looking to ground their career in
a more international setting.

Remuneration is up to JPY12m depending on your experience
and seniority.


- President, Plastics Manufacturer, Ebina, JP12m – JPY18m
- eSourcing Account Manager, JPY4.5m – JPY5.5m
- Snr Network Engineer, Telecon Vendor JPY8m – JPY12m
- Level 3 support Engineer, Global Vendor., JPY6m – JPY8m
- Fixed Income Developer, European iBank, JPY8m – JPY12m

Interested individuals may e-mail resumes to:

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Interested individuals may e-mail resumes to:


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---------- CCH Japan presents 'HR Seminar 2010' -----------

Managing and Motivating Your Japanese Team for Success

'Bridging Cultural Differences as a Leader'

- What expectations Japanese have of their managers
- What Japanese think of Western managers
- How to pose questions to get the most informative responses
- How to give directions so that they are clearly understood
- Giving feedback to Japanese subordinates
- Key cultural differences
(directness of communication, hierarchy, and management style)
- The new workforce in Japan
(The different generations in the Japanese workplace and more..)

Date: Thursday, 29th July 1:30pm-5:00pm
Venue: Happo-en 5F Linden Room
Speaker: Rochelle Kopp, Principal, Japan Intercultural Consulting
Number of Seats: 50, Language: English
Fees: 20,000 yen + tax
Register at:

For more details, Please Contact us at:,
or 03-3265-1161,

------------- ICA Summer Networking Party!!!!! ------------

The ICA invites you to join our Summer Networking Party at
La Boheme in Shirogane. This will be an excellent
opportunity to catch up with old friends, meet new people
and network with peers in related industries, or simply to
put names to faces.

Open bar (beer, wine, soft drinks) and great food will
be included. Be sure to bring your colleagues and friends
to join the party. Open to all, RSVP required.

Date: Thursday, 29th July, 2010
Time: 19:00 to 21:30pm
Venue: La Boheme, Shirogane
Cost: 3,000yen ICA members, 5,000yen non-members.
*Includes open bar (beer, wine, soft drinks) & great
quality food.



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

*** We stirred up a hornet's nest last week with our
commentary on how the Japanese manage their forest. One
reader told us we were anti-Japanese, while another with
government responsibilities admitted we were "right on the

Whether or not you agree with our position on various issues
that we cover, we still appreciate hearing from you, our
readers, so please keep those comments coming.

/...The TT Janitor.


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Written by: Terrie Lloyd (

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