Not Content With Content

Back to Contents of Issue: November 2000

After success with a few mobile Net sites, small-town ISP and content creator Nnet is selling the tools to make such sites.

by Daniel Scuka

NORTHERN JAPAN-BASED Nnet's core business is the provision of Net access, both wired and wireless. As a traditional ISP, the firm competes in what is essentially a commodity market, and -- other than the fact that some areas of rural Japan are underserved by ISPs -- there is little prospect for other than moderate growth. This is where managing director Tomomi Nakano's background as a digital graphic designer, combined with his willingness to take his fledgling firm in new directions, comes in handy. Two years ago, Nnet branched into the content provision business, launching a local town and community information site serving Iwate and the Tohoku area in English and Japanese. The firm also hired some talented developers, and started working on applications, including groupware messaging packages, marketing databases, and graphic software.

Tomomi Nakano
Tomomi Nakano
Nakano, by the way, is locally famous as a hometown Net guru helping to build a real, live Internet company. The firm is enjoying steady if modest success and now has 60 employees in Morioka, Sendai, and most recently Tokyo.

When NTT DoCoMo's i-mode wireless access service launched in February of last year, Nakano jumped at the opportunity to shift his content services to the small screen. "At the time, none of the i-mode content sites provided regional information, so it seemed like a good idea," he says. The proof is in the pudding, or in this case the access logs, as Nnet's i-mode site is now receiving 400,000 visits each month, according to Nakano. Nnet's site is listed on three mobile networks' official menus.

The firm is hoping to score another mobile-based hit with its newest business: developing wireless applications. The firm's first offering is called C-Web, a sophisticated Web site editing tool that allows a developer to create and update text and graphics on Web sites that are formatted for each of the three big wireless Internet services (i-mode, J-Sky, and EZWeb). The package is sold as a stand-alone application, and the firm is targeting other wireless content providers both in Japan and abroad (an English version will be available this year). "C-Web allows real-time site updating, making life tremendously simpler for mobile developers," says J. Sean Bennett, from Nnet's R&D group.

The prospects for application developers like Nnet are quite good if the existing platform-to-application ratio for the PC is any indication. "Hundreds of applications have been developed for the PC, and mobile devices are a new platform -- each requiring hundreds of applications to meet society's mobile computing needs," says Hasshi Sudler, principal at the Internet Think Tank, a Tokyo-based consultancy.

But one difficulty may lie in the fact that programming for mobile sites could become a commodity business. Some believe that the real money will be made in providing security, caching, compression, and other software-implemented enhancements that improve the mobile surfing experience. "The companies that will make money are the ones that improve anything that is a bottleneck -- which the carriers will want to use with their network," says Mark Berman, a Tokyo-based Credit Suisse First Boston analyst. "That could be worth a lot."

It's likely that Nnet could prosper by carving out a niche in the mobile multimedia editing space; many industry observers have stated that music and streaming video will become killer apps on the wireless Web, and creating that kind of content takes talent and relatively sophisticated tools. Nakano says the firm is already working on new mobile video and graphics editing apps that will allow real-time updating of multimedia small-screen content. He also explains that there's an IPO possible in the future, but for now the firm is concentrating on C-Web sales. Nakano was in Tokyo recently to help close a sale to the firm's first big portal client: Excite Japan. Not bad for a small-town startup.

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