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KKR: Japan ‘fertile territory’ for private equity April 27, 2007

Posted by fukumimi in Economy & Business, Japan.
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The FT article.

I wholeheartedly agree that Japan will be ripe with opportunities for private equity players. There are lots of PE firms expanding their presence in Japan as we speak.

Whilst traditional business interests seem to have been successful in manipulating the media to sensationalize the activities of PE funds and tarred them all with the same brush as money obsessed vultures willing to do anything to make a quick buck, I personally think that PE firms can be a force for good in the current Japanese business climate, and it may be necessary for outside influence to kick start the process of introducing change into the system.  It would seem much easier for foreign firms with no ties or associations to attempt audacious deals than for natives.

That is not to say that I am a fan of the overly aggressive and/or short-sighted practices employed by some firms/funds, but maybe having such players in the game is a price the local business ecosystem has to pay to allow firms with more balanced strategies to operate.

I hope PE firms become an agent for change for the better in Japan, there are lots of companies and departments within companies with substantial unrealized value, and if the potential can be unlocked, it will strengthen the Japanese economy as a whole.

I hope the PE firms learn from the mistakes made by their VC cousins who attempted to break into Japan and then retreated back in the early 2000s. The biggest challenge may be to find the right resources to staff their local offices.

Drecom revises earnings (downwards of course) April 11, 2007

Posted by fukumimi in Economy & Business, IT, Japan.
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Drecom, which had one of the big IPOs last year (back in February, with the market cap exceeding JPY100B at one point), announced it is revising its full year(closing end of March) sales and earnings figures downwards. Sales down 42% from a projected JPY1.5B ($12.5M) to JPY870M, with ordinary profits down JPY400M to a loss of JPY180M.

Shares were down nearly 10% on the day closing at JPY689,000.

That still values the company at JPY13.7B ($114M).

The interesting thing is that Drecom had released its 3Q earnings just two months ago. Full year guidance was unchanged, even though cumulative sales for the year were just JPY602M for Q1~3 against a target of JPY1.5B.

Two months later, they revise sales forecasts down 42%. Surely some heads should roll. (If I were a betting man, I’d bet against anyone actually taking responsibility though….)

I wonder if the logic was that the Q4 spike last year was going to be repeated this year. It would be interesting to see if they had a pipeline to justify such reasoning, or if it was just wishful thinking. I’d bet on the latter, if I was a betting man.

You thought PayPerPost was bad? April 11, 2007

Posted by fukumimi in blogosphere, Economy & Business, Japan.

Following up on a post I wrote last November….

CyberBuzz (which I wrote about in the previous post) says they activities are twofold:

  • Advertising focussed on CGM
  • Word of Mouth marketing facilitation

CyberBuzz is an astroturfing agent, plain and simple.

Advertising focussed on CGM? I think they mean Consumer Generated Advertising. Paid shilling.

From their terms of service:

第12条 (禁止事項)

1. 会員は、本サービスの利用に当たって、以下各号の行為又はそのおそれがある行為を行ってはならないものとします。

Article 12 (Prohibitions)

12.1 Members must not:

12.1(1)….Publicize payments received….

So, an astroturfing shop which explicitly bans users from disclosing that they are paid to post. This must surely be worse than Pay Per Post….

CyberBuzz is a 100% owned subsidiary of CyberAgent, which is listed on TSE MOTHERS. It this kind of lack of judgement which gives the internet bubble “successes” a bad name (not to mention the ethical bankrupcy inherent in pretending to be “consumer generated media”). Some people might remember that CyberAgent got blacklisted by Google last March because of their questionable SEO practices.

My previous post mentioned another shill agent called Blomotion, at least that service requires users to display a Blomotion banner on their blog to progress to the more lucrative compensation levels, although personally I wouldn’t settle for anything less than a per post disclosure policy being mandatory for word of mouth “advertising”. I see that CyberAgent and its corporate VC subsidiary are also shareholders in Mobile Factory, who operate Blomotion. Coincidence?

If PayPerPost had stipulated that they required users to keep the financial relationship secret, I wonder how big the whole fuss would have become.

But this is Japan, where the media and advertisers are joined at the hip (mediated by the advertising agencies, of course) so I doubt much of a fuss is going to be made even if this issue become more prominent.

Addendum: I was looking at the Blomotion sign-up page where they have a link to tutorial pages with screenshots of the UI (CyberBuzz is a bit more secretive/user unfriendly). What was interesting was that they have screenshots of how to post a shill post. Requirements include number of words, topics to write about, linking, etc, but most interesting was that they had a “how to tag(link)” tutorial, which shows that the html which users are requested to insert a link to the advertiser, and an image file used for tracking purposes. The image file (http://pv.blomotion.jp/img/pv/entry-pv.gif) is a 1x1pixel transparent (and therefore invisible) image. I had thought that maybe they were using an affiliate advertising like link but this way (which is used often used for cookie tracking), using a direct link to the advertiser’s site, the advertiser gets inbound link love which may in fact be more valuable to them in the long term by boosting their search engine rank than clickthrough traffic that comes to them via the shill post.

I think I like this model even less now, with the smell of dubious SEO practices in the air. I have a strong suspicion that the shill posters may be being misled as to the value the posters are providing (or at least being told only part of the story).

Gmail now available on all major mobile carriers (in Japan) April 10, 2007

Posted by fukumimi in Japan, Mobile.


Gmail can now be accessed using the standard mobile phone browsers on DoCoMo and Softbank, as well as au. (reported here)

I see that there was no mention of Willcom or new entrant eMobile. I guess these providers don’t penalise users for using full browser sites in the way that the traditional mobile carriers do and is less of an issue anyway. (plus I think virtually all the handsets for these carriers have full internet capable browsers installed, mainly Opera Mobile?)

As a Gmail user, in the past I’ve resorted to using the full browser capability on my DoCoMo phone when I needed to check my personal email whilst out and about. (Another way was to use a reformatting proxy service like Mobazilla, but sending login information to some proxy isn’t my idea of fun)

Now that Gmail is supported on the standard mobile browser, no more extra data packet charges beyond the flat rate charge for i-mode.

Joooooooy. (in my best Stimpy voice)

(For really private or business sensitive correspondances, obviously I use more secure methods which a) do not involve Google, and b) involve encryption – oddly correspondances related to my day job don’t seem to be afforded any where near the same level of security, but then I don’t make those rules)

Good Bye to Eichi Publishing April 5, 2007

Posted by fukumimi in Economy & Business, Japan.

Good bye and good riddance to the publisher (link appears down) of racially inflammatory content.

Eichi Shuppan has closed its doors and is being liquidated. It had oustanding debts of JPY2.3B (about $20 million give or take).
I’m sure people like Debito and JapanProbe will be celebrating, although the failure of the business is unrelated to the recent fuss over racist publications, and is rather due to the fact that its parent company has closed its doors and Eichi was one of the subsidiaries which was already in trouble and could not stand on its own two feet. The publishing of smut had been transferred to a different company a long time ago (Eichi seems to have retained the sales rights in that reorganization, which was due to the company being busted on pornography charges), and that was the cash cow business anyway, although this line is no doubt also feeling the heat from internet sites (many of which apparently feature many scanned images from old magazines, including those of Eichi, so I’m told….)

Addendum: The news is courtesy of Teikoku DataBank via a Nikkei Telecon subscription (no link available to the actual data regarding Eichi, but see here for an article).