Case Analysis on Mixi vs Facebook

TABLE OF CONTENTS

A. Background of the Companies..........................................................................................................3

C. Current Status of the Companies.....................................................................................................6
a. MIXI...............................................................................................................................................6
b. FACEBOOK..................................................................................................................................6
D. DISCUSSION QUESTIONS.............................................................................................................7
a. How does a social network website depend on network effect among users?...........................7
b. Explain the advantages of Mixi in competition against a totally new competitor........................8
c. How do the advantages in (b) apply to Mixi competing against Facebook? Consider whether
Mixi users post in English or Japanese?..............................................................................................8
d. For Mixi, compare the advantages and disadvantages of switching to a real-name policy......8
References..................................................................................................................................................9
A. Background of the Companies
Nowadays, people have been engaging themselves to social media or social networking
sites which has become part of daily life routine. With the speed with which the internet
continues to evolve, it is impossible to neglect its influence, particularly that of Social Media,
which has been one of the hottest topics around the globe. The popularity of social networking
sites has been rapidly increasing over the last few years. They are so popular because they offer
many benefits and services and help users to connect with their friends, new people and share
opinions with likeminded people. They have been become a platform whereas users use to
practice their freedom of expression and many other stuff that social networking sites allows you
to do. Facebook and Mixi are both popular social networking sites. Such apps are being
patronized by users due to their features which easily catch people’s attention and interest.

Mixi is a Japanese online social networking service founded by Kenji Kasahara- a well-
known Japanese entrepreneur and one of the Japan’s richest people- and Akino Harada. Mixi
social networking was founded in 2004 and went public in September 2006. It was formed
basically as a platform to connect users with their friends within Asia in a more convenient way.
In fact, its name Mixi came from the words “I can mix” with other users. The headquarters of
Mixi Company is in Tokyo, Japan (SHONA, 2016). Mixi had been the most popular social
networking site in Japan for over than a decade. However, as years go by together with new
increase of the rating of other soial media platforms, Mixi is not as popular as it used to be the
first several years it has been released to public. Users were dominant in the country for it suits
to Japanese culture. Mixi took a hard hit a couple of years ago when they introduced stiff privacy
policies that ended up driving people away. Many Japanese turned to Facebook, but now they're
becoming disillusioned with that as well. Some have gone back to Mixi but others are moving on
to Line, Twitter, Instagram, Fcaebook and other social media platforms due to their popularity all
over the world. Mixi is not quite dead yet, but it is not what it used to be.

However, Facebook is currently the most popular social networking sites in the world
with billions of users now. Mark Zuckerberg was a Harvard computer science student when he,
along with classmates Eduardo Saverin, Dustin Moskovitz, and Chris Hughes invented
Facebook. Amazingly, the idea for the website, now the world's most popular social networking
page, was inspired by a botched effort to get internet users to rate one another's photos. //Access
to Facebook is free of charge, and the company earns most of its money from advertisements on
the Web site. New users can create profiles, upload photos, join a preexisting group, and start
new groups. The site has many components, including Timeline, a space on each user’s profile
page where users can post their content and friends can post messages; Status, which enables
users to alert friends to their current location or situation; and News Feed, which informs users of
changes to their friends’ profiles and status. Users can chat with each other and send each other
private messages. Users can signal their approval of content on Facebook with the Like button, a
feature that also appears on many other Web sites (Hall, 2021). In 2006, Facebook opened its
membership beyond students to anyone over the age of 13. Facebook is listed on the Nasdaq
stock exchange under the symbol FB. The company has a complicated early history but has
surpassed all the hassle and has now become the world’s leading social networking site. As we
all know, Facebook is a free site and accessible wherein you can customize your own profile
without much restriction compared to Mixi. Facebook's mission is to give people the power to
build community and bring the world closer together. People use Facebook to stay connected
with friends and family, to discover what's going on in the world, and to share and express what
matters to them.

Although Mixi is still a popular social media platform in Japan, Facebook, with features
such as fan pages and other unique features it provides, has become more essential and
convenient for many users in Japan, and people do believe with the user growth trends being
experienced, it may be just a matter of time before Facebook makes further inroads into Mixi’s
dominance or possibly, existence.

B. Comparison of the Companies

In this generation, social networking sites plays a huge part in our life, may it be in any
kind of fields. Social media platforms persuade millions of users each day. According to Brian
Dean (BackLinko), “As of 2021, the number of people using social media is over 3.96 billion
worldwide.” With the continuous evolution of internet, it is impossible to neglect this kind of
influence. To understand this, we researched how it takes place on leading social networking
platforms from two different countries to understand this phenomenon in the sense of persuasive
technology: Facebook in the U.S. and Mixi in Japan. Based on some persuasion goals, we
compared the two services: developing profile pages, welcoming friends, reacting to friends'
content, regularly returning to the web, and corporate social media marketing.

According to Alexa.com, “Facebook is the fastest growing SNS in the U.S., ranking #5 in
traffic for all U.S. websites. However, in Japan Facebook is not popular, failing to rank in the top
100 sites. Instead, Mixi is the leading SNS, ranked as the #5 website overall in Japan.” In Japan,
Mixi is the first social media that was launched in 2004. This social network website is leading
with more than 21 million users. While Facebook has only around 2 million users in Japan.
Given the deep cultural gaps between the U.S. and Japan, citizens in the United States and Japan.
Both countries are inspired and convinced by these social networking sites on a regular basis.

Traditionally, Japanese have had distinct online culture where individuals prefer to
protect their privacy and feel uncomfortable to share their personal details online. This is one of
the reasons why Facebook struggled at first in the market since their rules is to have your real
name posted. Meanwhile, Mixi values the privacy of their users and allows them to be
anonymous. People are not using their real names, so they can freely share their opinions. They
also have this feature that allows their users to check who has visited their profile, as they want
to know who has visited their profile.

However, we all know that nothing is permanent in this world. They are also
experiencing a rapid change. In 2011, Facebook users in Japan are rising rapidly. The users are
increasing by 21 percent in the first two months of the said year. Facebook is catching up, and it
is becoming more appropriate for corporate social media marketing with its fan page
functionality. Since Facebook is known not just nationwide but also worldwide, Japanese
companies are starting to build their business pages on Facebook. Analyzing that they can
promote their business and reach millions of potential customers. The growing presence of
Facebook in Japan is also a good opportunity for search engine optimization for companies in
Japan and foreign companies that want to extend their presence in Japan as search engines begin
or eventually integrate "likes" from Facebook into ranking algorithms. In addition to this, Mixi
users are connected to fewer friends than Facebook. Compared to Mixi users, Facebook users
aspire to have more connections.

The persuasive design of Facebook is more assertive and mechanistic in general, while
the approach of Mixi, by contrast, is subtle and indirect. Based on all the information that we
have got, we conclude that Mixi is more of a personal page like a ‘diary’ while Facebook is a
place where in you can connect and socialize to many users; may it be business related or not.
This study shows the discrepancies and similarities in how Facebook and Mixi are built to affect
the achievement of the objectives by users. These forms of persuasion stated seem to chart the
cultural gaps between the U.S. and Japan in general.

C. Current Status of the Companies

a. MIXI
Mixi is currently active in the market of Japan. According to Statista.com, as of January
2020, Mixi had a penetration rate of approximately 4.2% among women, whereas men used the
social network to about the same degree. While on the age demographic, Mixi had a penetration
rate of approximately 6.6% among people ages 20 to 29 years old in Japan. Mixi was once the
leading social networking website in Japan, but, today, social media alternatives and has shown
higher penetration rates. Currently, Mixi has 21 million registered users where 15 million of
these users are still active in the said social network.

Financially, for their fiscal year ended March 31, 2020, Mixi’s net sales amounted to
112.17B JPY, the company’s net sales went down by 22.1% compared to the preceding year.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) amounted to 20.07B
JPY, such amount is said to be lower than the preceding year by 52.3% while operating income
amounting 17.17B JPY went down by 58.2% compared to the fiscal year 2019. Despite having
these decrease in sales, Mixi group has made revision to their earning twice which then they
ultimately exceeded.

b. FACEBOOK
With nearly 2.45 billion monthly active users, Facebook remains as the most used social
platform reaching 60.6% of the total internet users. Among the high numbers of user as of
December 2020, roughly 47,460,000 users reside in the Japan which accounts to almost 37.6% of
its population, majority of the users in the Japan are ages 25 to 34 which had almost 11.8 million
active users, among these, 55.9 were women while 44.1% were men. In 2019, a significant
change in the user demographics of Facebook was among those in the age of 65 and higher
which grown from 26% to 40% in 2019. While active teenagers ages 13 to 17 decreased to 51%
in 2020, from 71% in 2015. Facebook is also prominent among high income earners, with 49%
of users who makes 74,000 dollars. On a daily basis out of the 2.45 billion, 1.62 billion actively
visits Facebook every day, 74% of the users in US actively uses the site daily. While, among
users with an age of 18 and up, the average daily time of usage decreased by 2% compared to the
previous years.

Financially speaking, Facebook advertisements reached 17.44 Billion USD in the first
quarter of 2020, which puts an average of 6.95 USD per user. As a result of COVID-19,
Facebook faced a significant fall in the demand for advertising towards the end if March which
had a fall of 15.9% compared to the preceding year.

D. DISCUSSION QUESTIONS
a. How does a social network website depend on network effect among users?
Angela of VersionOne defined network effect in the way “When a new user/member is added
to the network, it increases the value of the product or service to all other users”. She also added
that every known social networking site experience a time wherein when a critical mass is
reached, there will be large amounts of network value created which means when a company
reaches the point wherein they become self-sustaining and no longer in need of additional
investments, they reach a higher network, the set of connections between the company and the
individuals becomes beneficial to both groups.

The network factor of an individual is the key to keeping a social networking website
working effectively to begin with, in return, it makes an individual's network connection much
stronger, such as the website's capability to analyze and determine individual's social activities
and give suggestions and recommendations to transact with more people, creating more
dependence on the social networking website when it comes to networking.

According to Banton, 2020, network effect gives social networking sites growth rates. For
example, as more users post contents on social networks such as twitter, the more useful the
platform becomes. It was also said that the internet, or most likely social network, is a notable
example of a network effect because the increase of people using the network, the more the
company will introduce new features and updates. Network effects are valuable because once
they’re built, they practically preserve themselves (Jorgenson, 2015). For companies to grow to a
self-sufficient and sustaining company, they must develop a higher network effect or a higher
network value because this enables them to sustain a linear cost which will be beneficial to them.

b. Explain the advantages of Mixi in competition against a totally new competitor.

Japan which personality of itself in its customary culture has been supported by all
residents, conventional societies, for example, language, garments, and food, are the most
complimented in Japan. Particularly the language, Japanese residents are extremely worried
about the language that has been utilized in their day-by-day exercises. Although English is the
most language that has been utilized on the planet, Japanese individuals actually focused on their
local language. That is the primary driver that informal communities, such as, Friendster,
Facebook went through the trouble to prevail in nations like Japan.

Mixi is the first online social networking site in Japan. It was established in February
2004 and is the property of Mixi, Inc. Mixi, Inc. was founded in 1999 as a limited liability
company by Kenji Kasahara and became a Japanese corporation in 2003. Mixi, which is entirely
Japanese, is one of the top social networks in Japan, due to that, despite the fact that there is more
software with similar functions, Mixi users are unwilling to learn and switch to other applications as they
become available, for the reason that they have become loyal and used to using the said platform. It is one
of the advantages of Mixi in competition against totally new competitors. In addition to that, another
advantage of Mixi with regards to competition is its anonymous status because it allowed individuals to
come out of their shell and express themselves more freely on the social network platform.

c. How do the advantages in (b) apply to Mixi competing against Facebook? Consider
whether Mixi users post in English or Japanese?

In contrast to conceptions of Facebook as more public social network, Research indicates

that some users, especially young women, are more likely to choose Mixi to communicate in
more private ways with close friends. Moreover, since it was created until now, the original of
Mixi, Mixi users must be anonymous. The reason for staying anonymous is to stress that users
are anonymous because Mixi wants to allow users freedom to openly express their thoughts.
When Facebook began to practice open registration for all users, the key point was just an email
address. In the final analysis, when we look at what Mixi and other alternatives like Facebook
concentrate on, while Mixi focuses more on group entertainment, meeting new individuals based
on shared interest, Facebook focuses more on helping you communicate and interact with others
in your life.

d. For Mixi, compare the advantages and disadvantages of switching to a real-name

policy.
Switching to real name policy is great for political and business connections, since it will be
easier for transactions, advertisements, and communications. Plus, posts will seem more
authentic when a real name policy will be implemented. Mixi can be a platform wherein
businesses can cultivate business relationships among different business partners because
implementing a real name policy enables formality for them. Users using their real names would
also be able to connect to one another in a personal way because anonymity is not an issue.

However, the disadvantage is that since Mixi operates similarly to Facebook, any casual or
leisurely activities on the social networking website may impact or affect the individual's
political or business image. Aside from that, Mixi would need to implement heavy privacy
settings in order to protect the user’s images.
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