Cybird Proves Online Content <i>Can</i> Pay

Before Cybird, it was thought that no one could make money from online content in Japan. The complexity of PCs and Japanese consumers' reluctance to surrender credit card numbers over the Web drove many an online content provider into dire straits. This included Cybird president Kazutomo Robert Hori, who in 1994 was running an ill-fated pay-for-content site called Paradise Web.

In 1998, the idea of using cell phones for the Internet hit upon Hori when he saw young people in Shibuya walking around with their keitai. Cellular companies like NTT DoCoMo, he reasoned, could bill subscribers each month for whatever content was used and then pass the fees on to providers after taking a percentage.

Hori thought the idea was commercially viable and approached cellcos -- he was persistent to the point that one executive threw a shoe at him. In the summer of '98, Hori heard that NTT DoCoMo was preparing to offer Internet service via i-mode cell phones. The service launched in February 1999, and DoCoMo signed Cybird up as the first official content provider

Cybird charges from \100 to \300 per month. Sales reached \375 million in the year to March 2000. Industry analysts project a 10-fold jump in Cybird's sales in the current year to March 2001: many think this year will see the birth of a full-fledged content service market, partly because all DoCoMo cell phones from this autumn will be i-mode compatible. Furthermore, the number of wireless Web devices being used in Japan is expected to jump from around 6 million now to about 75 million in 2003. Another encouraging prediction by a major research firm is that up to 43 percent of Net users will get online through i-mode phones by 2003. All of this is good news for Cybird, which can expect plenty of new customers.

On the downside, NTT DoCoMo has been encouraging competition among content providers. Not that it needs to, really: the number of content providers went from 65 when i-mode started in February 1999 to 989 in June 1999 (with 520,000 i-mode users) to 4,069 in December 1999 (3.13 million users) to 9,337 in April 2000 (6.08 million users). Intel is working with Cybird to develop content for the 3G phone system slated to go live next spring. Cybird plans to go public over the OTC later this year.