Internet
ò Livedoor Co. announced its decision to sell its financial arm Livedoor Financing Holdings to Advantage Partners, an investment fund, despite earning around 70 percent of the group's total profits. Sources said that the Livedoor group would try to work on its recovery by focusing on its Internet portal services. Industry sources said the company plans to sell its shares in Livedoor Financial Holdings to Advantage Partners for about 17 billion yen (US$146.7 million). The sources said under the deal, the new owners will probably have to shoulder another 30 billion yen (US$259 million) in existing debts. In a separate development, the six-member board of Livedoor Co. revealed that everyone but the company president Kozo will step down during its December meeting. The board will also seek approval at the general meeting for an proposal to create a new board. The four members of the board will include an official from cable broadcaster Usen Corp. and three recommended by foreign investment funds, a lawyer and two foreigners. The foreign investment funds and Usen President Yasuhide Uno are expected to have a combined stake of more than 50 percent in Livedoor. Industry sources said the two have demanded the management shakeup. The major shareholders would take the initiative in rehabilitating Livedoor.
Mobile/Wireless
ò Industry sources said that NTT DoCoMo Inc. has announced its selection of Motorola Inc. and NEC Corp. to supply handsets for its so-called super 3G network. The report also said Fujitsu Ltd. would supply the base stations for the network, which is an upgrade to DoCoMo's existing third-generation (3G) infrastructure. The infrastructure is seen as enabling a faster download and upload of data such as video and music clips. For its existing 3G network, DoCoMo buys its network equipment from a range of suppliers including NEC, Fujitsu and Swedish maker Ericsson It mainly buys phones from domestic makers such as NEC and Matsushita Electric Industrial Co. but has also been adding new handset vendors for its existing network, including Nokia. DoCoMo said it has planned to have the super 3G network ready by around 2009.
ò NEC said it has reported rising losses following the decline in its sales of mobile phones and personal computers and its absorbing of restructuring costs. NEC posted a net loss of 7.4 billion yen (US$63 million) in the six months to September, but said it would be profitable by March. The company said its sales posted a 2.5 percent decline to 2.2 trillion yen (US$19 billion), even as its operating profit went up by 22.5 percent on demand for semiconductors and network systems. NEC indicated that its investment made for the upgrading of its semiconductor plants contributed to its losses. Market sources indicate that NECÆs mobile phone business has struggled with competition from rivals Sony and Toshiba in the domestic market, and from Nokia in international markets.
Media, Entertainment and Gaming
ò Culture Convenience Club (CCC), which operates Japan's biggest video rental chain, Tsutaya, announced that it will launch an online download service for films next spring. Under the plan, CCC subsidiary Tsutaya BB will eventually offer streaming and downloadable VOD services, as well as sales. The line-up will include 1,000 pictures, both Japanese and foreign. The agreement will see Tsutaya BB sourcing the contents, preparing films for downloading and managing online distribution. Another CCC subsidiary, Tsutaya Discas, will supply the service on its site, where it operates a CD and DVD rental service for 1.7 million members. Tsutaya stores served 19.3 million members as of the end of September, up 1.4 million or 7.6 percent compared with the same period the previous year. The stores recorded 416 million rentals in 2006, compared with 160 million theater admissions. In a related development, the company said Tsutaya Online had recruited 9.9 million members by the end of September, up 2.2 million or 28 percent over the same period the previous year. Tsutaya operates 1,275 rental video stores through Japan, as well as 851 that also rent CDs, 441 that offer games and 353 that sell recycled DVDs and other packaged software.
ò Advertising.com Inc., a subsidiary of AOL LLC, announced entering a deal with Mitsui & Co., Ltd. to create a new joint venture to serve the Japanese online advertising market. The venture will come under the name Advertising.com Japan. According to data from Mizuho Corporation Bank Research, the US$3.4 billion online advertising market in Japan, which is the worldÆs second-largest market, is expected to grow to US$4.9 billion by 2009. The venture is described as linking advertisers and web site publishers through a centralized network. Advertising.com currently operates the largest third-party display-advertising network in the U.S. Under the agreement, Advertising.com Japan will leverage Mitsui's established industry relationships with Japanese advertisers and publishers. Advertising.com will provide use of its proprietary ad serving and AdLearn optimization technology. In addition to Japan, Advertising.com has operations in England, Germany, France, Spain, Sweden, Norway, Denmark and Finland, with its headquarters located in the U.S. Advertising.com conducts strategic direct-response and brand marketing campaigns that guarantee bottom-line results for its clients. AOL is a global web services company that operates some of the most popular online destinations and offers a comprehensive suite of free software and services. Mitsui & Co., Ltd. is one of Japan's largest general trading companies. Financial terms of the deal were not announced.
ò GameOn Co. Ltd., a Japanese online game operator in which Webzen Inc. has an equity stake, announced that it will list on the Mothers Market. The Mothers Market is for the high-growth and emerging stocks in the country. GameOn Co. Ltd. was established in April 2001, and has been operating online games such as MU (Webzen Inc.) and Red Gem (Samsung Electronics Co. Ltd.). E-Samsung Japan and Softbank Co. Ltd. are the major shareholders, with Webzen Inc. holding 4.5 percent. The price will be set in the beginning of December, and the valuation amount will be determined later on.
Hardware
ò Sanyo Electric Co. said it expects to report a loss for the third straight year, with the company attributing the decline to a drop in the sales of mobile phones and digital cameras. The company said it forecasted a net loss of 50 billion yen (US$430 million) for the year ending March 31, 2007, compared to a May target for 20 billion yen (US$172.6 million) profit, and a record 205.7 billion yen (US$1.7 billion) loss a year earlier. Sanyo, however, said that its first-half loss narrowed to 3.6 billion yen (US$31 million) from 142.5 billion yen (US$1.2 billion) a year ago. The company said it has plans to spend an additional 40 billion yen (US$345.3 million) this fiscal year for 2,200 job cuts and other restructuring costs. To counter the competition from Chinese and Taiwanese manufacturers, Sanyo said it is forming partnerships with Taiwan's Quanta Computer Inc. and China's Qingdao Haier Group. Earlier, the company announced a handset-making venture with Nokia Oyj but nothing came out of this plan. In a related development, Sanyo disclosed its plans to sell its cell phone operations as part of a new restructuring plan following the losses it experienced.
ò In a bid to respond to the increasing demand for LCD televisions, Fujifilm Holdings Corp. announced its plan to invest 24 billion yen (US$206 million) on a new factory to make film used in LCDs. The company said the factory would start operations in April 2008, boosting production capacity for a series of film products that are used to protect the polarization plate in LCD panels and enhance LCD picture quality. Fujifilm is investing in flat panel display materials to boost growth and offset businesses in decline such as photographic film. Fujifilm controls 80 percent of the market for triacetate cellulose (TAC) film, an indispensable component that protects the polarization layer. Konica Minolta Holdings Inc. is the only other major producer holding about 20 percent of the market. Fujifilm said it has set aside some 110 billion yen (US$949.8 million) to build six production lines at a new production site in Kyushu, with the first line having begun production last month.
ò The president of Hitachi Ltd. said his company is studying a plan to promote plasma TVs abroad with Matsushita Electric Industrial Co. and Pioneer Corp. The marketing move is a response to the sharp increase in flat-screen TV sales in Europe and elsewhere. Market sources indicate that currently only LCD TVs are providing strong competition for plasma sets. According to DisplaySearch, shipments of LCD models outnumbered those of plasma TVs in the global market for 37-inch and larger sets for the first time in the July-September quarter. Hitachi identified Europe, North America and China as its target markets even as no specific details about when the three Japanese manufacturers will launch the joint promotional initiative or how extensive such efforts will be. Earlier in 2005, Hitachi set up an agreement with Matsushita to jointly develop and manufacture plasma TVs.
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