Why Yahoo Japan and NOT Google? — Thoughts on Media Business

Last week I wrote a post about Yahoo Japan. Whenever I say,

Yahoo Japan is the №1 visited PC site in Japan.

Most people regard it as one of the unique country where Google isn’t dominating. Just as Russia has Yandex and Koera has NAVER, Japan has Yahoo Japan. I understand that the situation is very different in many other countries and that many of the successes of Yahoo Japan can’t be simply replicated.

However by understanding WHY Yahoo Japan is still stronger than Google (at least in the PC field), I believe this reason may be useful for companies running a media business in a very early market. Therefore, I’d like to share my thoughts on the reasons why Yahoo Japan succeeded in Japan with some background information. In addition, I’d like to put together my belief of the overall media business.

Trajectory of Yahoo Japan and Google

Information from IR

When Google came into Japan market, Yahoo Japan already had over 150 Mn daily page views. Although Google had some disadvantages, as you can see from the bar graph below, Google was able to show some high growth rate right after it launched in Japan.

Data from Impress R&D

Considering its growth rate, Google did have certain potential of becoming the dominant in the following years. But it didn’t happen at least up to date on a PC basis as of 2016.

Data from Nielsen as of 2016

Why? I believe there are 2 reasons.

Reason

So what are the benefits of moving faster than others?

When you’re there first, you have the privilege to attract all the target users so the user base can increase quickly. From the trajectory table, you can see that Yahoo Japan reached 5 Mn daily page views in just 15 months. I guess this point is often said in many places so I won’t go any further.

Another point I’d like to emphasize more is that the first player in the market can create a new habit that will take root for quite a while as long as the service is kept at a certain level of satisfaction.

In this case, Yahoo Japan first focused on building a portal that has all the information neatly gathered into one place and allowed users to access to each service or information by directory search.

Yahoo Top page as of 2001. Image from web archive

Therefore, when Google launched in Japan I can imagine that people thought it looked so simple.

Yahoo Top page as of 2002. Image from web archive

Though Google gradually increased its share by being used by Yahoo Japan and other domestic search engines, this ‘altogether in one place’ mind is still apparent on PC devices. Check out current Yahoo Japan top page! I feel that since the directory search was optimized to the local needs, it was easy for many people to jump right into it and even stay there. If Google came in first, I bet the way people surf internet would have been very different. Since it didn’t, this one page, not so high tech portal, is still an important hub for many Japanese today and generating millions of dollars. Be better than the global giants at providing contents that fit the local demand.

Reason

Information from IR. $1=¥115

Thoughts on overall media business

So Yahoo Japan is healthy enough to survive the next 10 years?

Data from Nielsen as of 2016

You may think that the business mainstream is always occupied by large internet companies or conglomerate and that there is always no space for new comers but I happen to think those are not true. Understanding that there are difficulties, the competition never ends and there is no ‘peace’ in a market that rapidly changes — just like the internet market.

@ DCM Ventures (Tokyo)

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