serkan AT kantan-games.co.jp

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Review: 8 reasons why Yahoo rules Japan

My posting about the Top 50 web sites in Japan featured a winner: Yahoo Japan.

The company not only dominates Internet search in Japan (approx. 65% market share) but the Internet as a whole, offering a wide range of services. Corporate business figures are not too shabby either. From April to September this year for example, Yahoo Japan’s profits equaled 29,27 billion Yen (254 million USD/178 million Euros)!

Here are 8 reasons for Yahoo Japan’s success so far:

1) Head Start
Yahoo started Internet operations in Japan in 1996 when Google didn’t even exist.

2) Tie-up with Japanese communications powerhouse Softbank
Yahoo Japan didn’t just translate its service but localized it in cooperation with a strong Japanese joint venture partner (telecommunications giant Softbank). Actually, Softbank owns 41% of Yahoo Japan while Yahoo Inc. only owns 33% of shares. In my view, Yahoo Japan is in fact a very, very Japanese company…

3) Adoption to Japanese tastes
Yahoo Japan’s top page is cluttered (see the screen shot below for a translated version). Google Japan’s top page is as minimalistic as its non-Japanese versions which is a good thing in my view. But Yahoo’s design is appealing to Japanese people. Users here are used to see a lot of links and text boxes on a top page. In a way, they expect it to be like that!

4) Wildly successful auction site
“Ebay? What’s that?” would be the answer the average Japanese Joe would give if asked if they knew a company of that name. There is actually no Ebay Japan (here is why they failed 5 years ago). Yahoo’s auction service is absolutely dominant in Japan and makes a LOT of money. There are over 15 million items on sale! They have a popular mobile version, too.

5) Comprehensive online service lineup
While more or less buried in the West, Yahoo Japan is living proof the “Internet portal idea” is very much alive, at least here in Japan. I personally regularly use Yahoo to look up the TV program, weather, news, train information and much more. See the picture below for a translation of the Yahoo Japan top page.

Picture: Top page Yahoo Japan (click to enlarge). This is the brushed-up version which is available after January 1st, 2008.

Let me break down the particularly important “CATEGORIES” column on the right (from top to bottom).

The first part is entitled “Yahoo!サービス” (Yahoo services) and covers 17 items:
Shopping, auctions, travel, news, weather, sports, map, traffic info, real estate, eating out, cars, BBS, blogging, beauty and dating.

The second part (お気に入り, meaning bookmarks) consists of five items:
Movies, music, games, astrology and videos.

The third part is named “ピックアップ” (Pick up) and currently features selected music only.

6) Investments in Japan
Yahoo Japan has a history of investing in the Japanese market signaling serious commitment to the domestic market. The company employs nearly 2.700 people in this country. Its HQ is located in Tokyo’s poshest office complex, Roppongi Midtown in Tokyo.

Yahoo is also Japan’s biggest broadband operator (Yahoo BB)!

7) Cooperations with Japanese companies
I already blogged about Yahoo Japan’s plans to bring the web to HD-TVs (in cooperation with Sharp). The investment in Japanese web company GMO Internet (13.5 million USD two weeks ago) is a second and more recent example for Yahoo’s integration in this country’s economy.

8) Innovations
One recent example for a new service from Yahoo Japan is “Yahoo Videocast” which is not available in other countries. This subsite makes it possible for users to upload and watch videos from their mobile phones and on the web. Yahoo claims videos can be displayed on any handset. Not a huge thing but it shows they put some resources into fighting Youtube and Nico Nico Doga, at least here in Japan.

Moreover, Yahoo Japan and Ebay America are cooperating now so that Japanese people and Ebay users can trade internationally (background). This new service is called Sekaimon (“door to the world”).

Did I forget anything?

Serkan Toto About Serkan Toto
I am the CEO & Founder of Kantan Games, Inc., a Tokyo-based game industry consultancy focused on the Japanese market. Please subscribe to updates on this site via RSS or Email.