Fall, 2005 |
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Market Snapshot - Japan
Baseball and the Japanese Internet Industry
In the United States, it is not
uncommon to have a baseball stadium named after a company- think SBC
park, Coors Field, Bank One Ballpark. The stadium name has always
been for sale to advertisers. But the team’s name on the other hand,
has always been reserved for the City the team calls home. In Japan
however, the tradition has always been the reverse: teams are named
after the company that represents the team’s owner, usually a major
Japanese corporation. For example, Yomiuri Giants (newspaper),
Hanshin Tigers (railway), or Orix Blue Wave (lease financier). The
importance of this tradition is that the corporate name, rather than
the team's home location, becomes the nickname for the team. During
baseball season, the company names get repeated constantly during
the nightly sportscasts, and printed abundantly in the daily and
weekly sports pages. Team ownership is, in a sense, a ticket to
household acceptance. So it was with great fanfare that two, and
almost three, key players in the Japanese Internet entered the
baseball arena last year.
The first company to be successful in
its bid to enter Japanese baseball was Rakuten, the Amazon of Japan.
Rakuten, the largest ecommerce portal in Japan, generated extensive
publicity when it applied to enter Japanese professional baseball
after the merger in 2004 of two teams led to a reduction in the
number of teams in the Pacific League from six to five. Rakuten took
the sixth spot on the strength of its application, which emphasized
its ability to breathe new life into Japanese baseball which had
been suffering from lagging popularity in recent years. Rakuten
hired an American, Marty Kuehnert (the first foreigner) as General
Manager and named itself the Tohoku Rakuten Golden Eagles based in
Sendai, Japan.
The other successful entrant was
software and telecommunications powerhouse Softbank which bought the
Hawks from failing retailer Daiei. Softbank is an IT-media
conglomerate, renowned for its low-priced ADSL access service, which
revolutionized Japan's broadband market by capturing more than a
third of Japan's 12 million ADSL subscribers. Now known as the
Fukuoka Softbank Hawks (notice that both Rakuten and Softbank have
started adding place names to their teams in the American fashion),
the team plays at the Fukuoka Dome and is also part of the Pacific
League.
Yet perhaps the most interesting
story of Internet companies in baseball in Japan is the unsuccessful
bid to enter baseball from Livedoor who competed against Rakuten to
start a team after the merger of Orix Bluewave and Kintetsu Buffalos
in the Pacific League last year. Livedoor started life in Japan as
an advertising sponsored ISP but gradually moved into multiple other
businesses fueled by investments from the venture capital community.
The company today offers online securities trading, DVD rentals, Web
hosting, an Internet auction site and owns a venture-capital
investment arm, an IT consulting business, and a
mobile-phone-software developer. Takafumi Horie, the 32-year-old
chief executive of Livedoor, shocked Japan's sports world when he
announced his intent to form a baseball team. The elders who control
Japanese baseball were disgusted, with one commenting that it would
be impossible "to let some unknown person in."- needless to day,
Livedoor didn't get the franchise.
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 Archive
View content
from past editions of our monthly Japanalyzer newsletter!
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This
Month's Bridge Builder
Featuring
the real voice of IT across the Pacific
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March, 2006
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New Wireless Technologies and Business Opportunities
Mr.
Yoshiaki (Jack) Motoyama, VP of Corporate Ventures Catalyst
Division GM of Venture Academic Relations, Hitachi America,
Ltd.
Most IT executives in Silicon Valley would
agree that when you want to find innovation in wireless
networking you have to look to Asia and not just the US. Key
wireless startups and services are emerging not just in
Japan, but in Greater China, Korea, and all across Southeast
Asia. In fact there is so much going on in Asia, hat
Stanford’s US-Asia Technology Management Center (http://asia.stanford.edu)
, under the direction of Dr. Richard Dasher, ran a public
lecture series devoted to the topic. The series was held
throughout Fall of 2005 and was entitled “Wireless Network
Businesses in Asia”. The series looked at the emerging areas
of wireless broadband, new technologies, markets and
business models from service operators, technology and
content providers in major Asian economies. One of the more
interesting speakers was Mr. Yoshiaki (Jack) Motoyama, who
has been promoting business and technology alliances between
venture companies and Hitachi since October of 2000. Mr.
Motoyama is credited with leading several strategic
investments and partnerships in the semiconductor and
wireless area. Currently, he covers consumer and wireless
technology, nanotechnology, and life science for venture
investment. He also promotes academic collaboration between
US universities and Hitachi. Mr. Motoyama spent most of his
career at the corporate level where he was involved in the
company's long range strategic planning and has led several
corporate projects such as restructuring the company’s
semiconductor business and new business promotion. This
month’s Bridge Builder focuses on Mr. Motoyama’s discussion
of Hitachi’s efforts to revolutionize wireless networking
with its own spin-off ventures developing new technology.
One major Hitachi venture he discussed was
its RFID project called the
MU-chip which was founded in July of 2001. According to
Mr. Motoyama, Hitachi’s Central Research Laboratory
developed Mu-chip as a cheaper smaller alternative to
today’s existing RFID chips. The Mu-chip featuresread only
memory and is battery-less. At 0.4mm x 0.4mm the Mu-chip is
the world’s smallest rfid chip. Its data capacity is a
128-bit unique ID number (written in production) with a
maximum communication distance of 30 to 100cm. According to
Mr. Motoyama, the Mu-chip has been used until now in pilot
projects such as within the ticketing solution for World
EXPO 2005 (the chip tracked users through their visit to the
expo). Hitachi envisions other key applications such as:
Security (in passports etc. for checking ID), individual
item tracking in the supply chain (because the chip is so
small and inexpensive), and in pharmaceuticals where
individual portions of medicine can be tracked and properly
administered.
The other major Hitachi venture discussed
was Hitachi’s Wireless LAN Positioning System called
“AirLocation” founded in January of 2004. The solution,
designed to be an alternative to GPS based systems, uses
wireless LAN technology to locate wifi devices or equipment
with wifi tags. AirLocation works both indoors and outdoors,
and has a small error range of one to three meters,
achieving highly accurate positioning of devices equipped
with 802.11b based wireless LAN functionality. AirLocation
performs trilateration by using wireless LAN signals
transmitted between five base stations and the designated
tag or device. Applications include the management of
incoming and outgoing of pallets, pallet locations, and
forklift locations in a warehouse and navigation services
within airports, museums, and train stations.
One of the more interesting moments in Mr.
Motoyama’s discussion was when Dr. Dasher asked him if any
of Hitachi’s ventures were part owned by other companies. To
which Mr. Motoyama replied that they were 100% Hitachi owned
and in that sense, not true ventures by Silicon Valley
standards. However, Mr. Motoyama made a point of mentioning
that his company’s $100 million corporate venture capital
fund, established in July of 2000, is targeted at external
ventures. Today Hitachi is still seeking investment
opportunities with such ventures, particularly those with
university backing (he personally works with Stanford, UCB,
MIT, Caltech, Cornell) or government sponsored incubation.
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Interop
Tokyo 2006
June 5-9, 2006,
Makuhari Messe
A total of 375 companies and 152,243
attendees and buyers participated in 2005 event. This is the event where
the leading companies are located – all to educate, Inform and excite…
and empower the audience to expand the e-business Initiatives through
state of the art networking technologies.
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