GOOGLIZATION OF JAPAN

Business in Korea and Japan – Asia MBA, Spring 2012

Janet, Raju, Sangjin, Carl, Rishabh, Yogesh

CONTENTS
DIGITAL JAPAN JAPAN SPECIFIC INTIATIVES COMPETITION MAJOR CHALLENGES THE MOBILE OPPORTUNITY B2C STRATEGY B2B STRATEGY CONCLUSION

DIGITAL JAPAN

internet market is NOT saturated as Japan lags still behind other countries in terms of Internet utilization • Ranks 9th in consumer Internet usage rate and 8th in corporate Internet usage rate Source : Ministry of Internal Affairs and Communications' "International Comparative Survey on ICT Infrastructure“ and Saren Sakurai(2010) .Digital Japan • 78% Internet Penetration: Highest Fastest Growing Industry on the planet • 67% Broadband penetration and 36% Fiber to the Home (FTTH) • One of the world's fastest and most affordable broadband services. • Despite popular belief.

ameblo. Rakuten. Location Based Networks and MOBILE web . MSN Blogging platforms have grown the fastest over the last 5 years: fc2. 2012+ The next wave will be uniquely Japanese form of Social Networks. 2008.2011 The most recent wave has been online: Youtube and Nico Nico. livedoor.2011 Japan has been in the portal era for over a decade: Yahoo.Trends In Japan 1998 – 2011 2006.

GOOGLE’S JAPAN STRATEGY : THE STORY SO FAR .

Japan specific initiatives • Allowing users to embed Google Maps on their diary Cooperating with Japan’s biggest social network Mixi • It shows how many times a website address has been bookmarked. One Green Project to help prevent global warming • Up-to-theminute news and search for missing people . Partnering with Japan’s most popular social bookmarking service provider Hatena Establishing Japan earthquake crisis response site • Contains tips for reducing CO2 emissions Launching microsite.

THE COMPETITORS IN JAPAN .

Firefox Map Google Map @nifty .com. Ameba. Mixi Livedoor. @nifty Yahoo mail. Nico Nico Search engine Social network News Email Browser Google search engine Google+ Google News Gmail Chrome Livedoor.Google’s competitors in Japan Google and its competitors in different areas Field AD Google's product Google AD Google's competitors Yahoo Japan. IE. Hotmail ( only PC ) Sleipnir. Rakuten Ichiba. Goo. Biglobe FC2.

POPULAR SITES IN JAPAN As of 2011 .

THE MAJOR CHALLENGES IN JAPAN .

Microsoft . ~38% Google) Microsoft portraying this deal as more damaging than the blocked Google-Yahoo US deal: “…there will be no search competition in Japan… Google will end up controlling all personal search information for all Japanese consumers and businesses…” .Challenges Faced by Google in Japan Microsoft’s lawsuit against 2010 Google-YJ deal: Antitrust and privacy 100% 80% 60% Others 40% 20% 0% Search market share Google Deal gives Google control of 95-98% of search market in Japan (~57% YJ.

Challenges Faced by Google in Japan Dependence on Yahoo Japan for advertizing and Web search market 57% search 47% ads 38% search 51% ads Google’s new-found lead can precipitate if the deal is not renewed .

over sharing hypothetical user [globally]… Japanese Web users. “One trait those [Japanese social networking] sites have in common is crucial to Japan’s fiercely private Internet users.Challenges Faced by Google in Japan Anti-Google stance of foreign governments in lawsuits. even popular bloggers. The Japanese sites let members mask their identities. typically hide behind pseudonyms or nicknames… there’s the question of Japanese Web culture…” – The New York Times . in distinct contrast to the real-name. Privacy considerations Google Japan has been ordered to remove terms from the “autocomplete” feature provided on its core Web search product.

camera phones in 2000. full music downloads in 2002. third-generation networks in 2001.” – The New York Times .Challenges Faced by Google in Japan How to provide features that are not what the Japanese already had five years ago? Galápagos syndrome “Japan’s… cellphones set the pace in almost every… innovation: e-mail capabilities in 1999. electronic payments in 2004 and digital TV in 2005.

Mobage-town (more users than mixi) adding SNS features “Japanese.” – The New York Times .Challenges Faced by Google in Japan Social networking competitors – “little reason to switch” mixi– 50-80% share. until now. and each offers its own approach to connecting people online. have flocked to various well-entrenched social networking sites and game portals — like Mixi. Gree. Facebook growing rapidly. Each has more than 20 million users. Gree and Mobage-town.

THE MOBILE OPPORTUNITY .

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B2C STRATEGY FOR JAPAN .

search etc • Integrating the web experience for the Japanese consumer on mobile will be the key • Localization will help Google use the above competitive advantages . Blogging.B2C Strategy • The biggest strength for Google in Japan is that Android smartphones now have 57% of the Japanese smartphone market • This is the sustainable competitive advantage that Google can utilize • Another competitive advantage for Google is that no other competitor can match offerings across the entire web – from Mobile. SNS.

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Role of Mobile .

.Why is Google advertising successful ? Displays advertising Relevance (for the user) Quality score (direct impact on advertising value) Performance (for the advertiser) Most relevant ad will be on top Cost per click of the ad : performance based advertising Total cost of the advertising is determined by number of clicks on the ads and not number of displays Google’s advertising model benefits the user (improved relevance) as well as the publisher (performance based billing & rebates).

B2B STRATEGY FOR JAPAN .

As the number of advertisers increase. the ecosystem strengths The Virtuous Cycle As the number of advertisers increase. Cusumano. Staying Power (2010) . the ecosystem strengths Number of Advertisers Adapted from: M. the number of users increase and vice-aversa.Number of Users As the number of users increase.

Think Big with Small Businesses Proportion of SMBs in Japanese industry (2006) Proportion of SMBs in industry by country (on basis of number of employees) • Japanese economic activity is underpinned by small-to-medium size businesses (SMB’s).S.S. • SMBs are the backbone of the Japanese economy.: Department of Commerce's "Statistics of U. • Internet’s capacity to inform a broad base of consumers at a low cost is a particularly powerful tool for marketing and sales.7% of all companies in Japan. EU: Eurostat's "Structural Business Statistics" . Source: Nomura Research Institute. • SMBs cannot invest in large advertising budgets. based on the following: Japan: Ministry of Internal Affairs and Communications' "Establishment and Enterprise Census". U. • SMBs account for an exceptionally high 99. Businesses".

Business Finder. Google is present across all segments . – the ENTIRE GAMUT of services • To monetize this build a consulting team that can cross sell and provide solutions to SMBs. Street View. Mail etc.Mobile.Offer the entire “Ecosystem” – not just one product • Unlike competitors. • For its Growth in Japan – Google Should be asking: How can we help SMBs like Strapaya and Mizuho Brush? . Social Network. Cloud Services. Search. Video.

3 Pronged Japan Strategy 1) Mobile 2) Eco-System Integration 3) SMB Focus .

THANK YOU ! .

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