- Rakuten became Tokyo Broadcasting System's top shareholder when it acquired more than 10 percent of the broadcaster's outstanding issues via off-market transactions. Under the Securities and Exchange Law, a buyer is required to conduct a tender offer if it wants to acquire more than one-third of shares in off-market transactions. Rakuten, however, bought just 15 percent of TBS shares, which exempts it from the tender offer requirement. The country's Broadcast Law allows TBS to refuse stock ownership transfers to foreigners once the collective stake held by overseas shareholders goes beyond a certain level. In reality, foreign investors have kept their shares by keeping the shares ownership under the Japan Securities Depository Centre's name. Foreign shareholders on record hold about 19.5 percent of TBS issues as of March 31, although the true figure is said to be higher.
- NTT DoCoMo and Rakuten announced their joint offering of internet auctions, a move that is seen as challenging Yahoo Japan. Under the partnership, Rakuten is planning to spin off its online auction segment in order to set up an entity in December; DoCoMo is spending 4.2 billion yen ($36.8 million) to secure a 40 percent stake in the unit, which is capitalized at 1.6 billion yen ($14 million). The new unit will continue to do Rakuten's online auctions for personal computers even as it establishes an online auction site for cell phones. Through the tie-up, Rakuten and NTT DoCoMo expect to complement each other.
- Welltone said it would start marketing a portable phone that would allow people to make free internet phone calls between computers by utilizing the Skype Internet telephony software. The phone is called Welltone Skype Phone and is fitted with a 64-megabyte NAND flash memory with built-in software needed for utilizing the Japanese version of Skype. The Osaka-based PC peripheral equipment developer disclosed that it has already filed an application with Skype Technologies SA of Luxembourg for permission to have the device listed as one authorized by Skype. The company, which will sell the phone to corporations directly on an OEM basis, is aiming for shipment of 50,000 units for the first year.
- Tokyo Forex Financial a currency broker, said it would import and sell a software package that will alert users on when to trade currencies. The software is called MetaStock Pro FX and developed by US firm Equis International. The software, which will sell for 114,000 yen ($999), uses historical data and trends to determine the hypothetical profit or loss when going through the decision to sell or buy a currency against another currency. The program will also alert the user when real-world exchange activity matches a situation in the instructions one inputs. Users must pay $135 to use historical data.
- KDDI and Tokyo Electric Power (Tepco) said they have reached a final agreement on KDDI's absorption of PoweredCom, a telecommunications firm where Tepco has about 83 percent stake. Under the agreement, KDDI will absorb PoweredCom in January by getting all PoweredCom shares held by Tepco. Tepco, in return, will get some 4 percent of KDDI shares in addition to the 1.3 percent share of Tepco in KDDI as of March 31. The acquisition of PoweredCom is expected to boost the competitiveness of KDDI. The merger agreement will result to Japan's fixed-line operations dominated by the so-called big three: Nippon Telegraph and Telephone Corp., Softbank Corp., and KDDI. In a separate deal, KDDI and Tepco announced their joint offering of broadband fiber-optic data communications services utilizing the power company's fiber-optic network infrastructure.
- Sumco, a Japanese silicon wafer maker, said it has received approval to list its shares on the Tokyo Stock Exchange. The listing is said to be the biggest Japanese IPO so far this year, with the offering of up to 48 million shares valued at 148.8 billion yen ($1.3 billion). In March, Jupiter Telecommunications had a global offering valued at 104.7 billion ($918.3 million). Up to 40 percent of Sumco's shares would be on offer in IPO. Daiwa Securities SMBC is one of the lead underwriters of the IPO; it also has a green shoe option allowing it to offer an additional 4.3 million shares in the event of exceptional demand.
- Ohara, a producer and marketer of optical glass and glass parts for information equipment, said it would go public on the Tokyo Stock Exchange. The company is Japan's top manufacturer of optical glass used in lenses of digital and other cameras. It commands more than 50 percent of the domestic market in terms of production. The firm's other core products are hard discs; the glass substrates for use in those discs are being produced at the Malaysian plant at full capacity. There is an increase in the need for hard discs in mobile music players and other devices. Ohara said it plans to use 2.8 billion yen ($24.5 million) of the 12.5 billion yen ($109.6 million) in IPO proceeds to invest in facilities at its domestic optical glass plant and the Malaysian glass substrate plant, with the remaining to be used to repay interest-bearing debts.
- Samsung Electronics announced a 30 percent decline in its third-quarter profit after it earned W1.8 trillion ($1.8 billion) in the quarter, compared to W2.6 trillion ($2.4 billion) in the same period a year ago. The company said its revenue went up 1.4 percent to W14.5 trillion ($13.8 billion) from W14.3 trillion ($13.6 billion) a year ago. The company's profit went down by W200 billion ($200 million), the amount of the provision it set aside to settle a $300 million fine declared by the US Justice Department after Samsung admitted guilt in the illegal price-fixing of memory chips from 1999 to 2002. Even with the penalty, the company's performance is still the company's best since the year-ago period. Samsung's chip business contributed most of its profit, with an operating profit of W1.3 trillion($1.2 billion), which is 63 percent of the company's overall operating profit of W2.1 trillion ($2 billion). Samsung's cell phone and telecom-equipment business reported operating profit of W550 billion ($526.6 million), a decline from W605 billion ($579.3 million) a year earlier.
- Taobao.com, an online auction site, revealed that its transactions for the third quarter amounted to Rmb2.3 billion($284.4 million), which is a 41 percent growth over the previous quarter. The company said its trading value in the first quarter was Rmb1 billion ($123.6 million) and for the second quarter Rmb6 billion ($742 million). The result makes the free online auction site one of the fastest growing e-commerce web sites in China. Total trading value in China's online auction market posted a 217.8 percent growth to reach Rmb3.4 billion ($420.4 million) in 2004. It is expected to have an 84 percent growth in the next three years.
- Google's free web log service, Blogger, can now be accessed directly by internet users in Beijing. Aside from this, Chinese internet users can now access cached web pages on Google's search engine. Blogger has long been inaccessible from within China without the use of a proxy server. The reopening of access to Blogger comes as Google initiates moves to boost its presence in China. The company has already established a representative office in Shanghai and has employed even a former Microsoft executive to hire researchers for planned R&D center to be opened in China.
- JCD, a provider of ring melodies, games and other content for mobile phones in China, announced that it will begin a service to help Japanese content suppliers do business in China. The Tokyo-based firm, through its wholly owned subsidiary in Beijing, said it would negotiate with local cell phone operators on behalf of Japanese companies. The subsidiary will operate some of the unit's 300 web sites jointly with Japanese firms to provide content and will help them prepare programs suited to local needs. It will help also client companies in the advertisement of their operations, the collection of payments and the conversion of their earnings to yen for remittance to Japan. JCD places the initial support fee at the starting rate of 5 million yen ($44,000), with monthly payments beginning at 1.2 million yen ($11,000).
- Linktone, a leading provider of wireless interactive entertainment products and services to consumers in China, announced that the company was selected by the Ministry of Commerce of the People's Republic of China and the China Radio and Television Society as one of the 25 best consumer products in China. Linktone provides a diverse portfolio of services to wireless clients, with a particular focus on media, entertainment and communications. These services are promoted through the company's own marketing channels and through the networks of the mobile operators in China.
- Qiao Xing Universal Telephone announced that its subsidiary CEC Telecom has launched 14 models of higher-end mobile phone handsets equipped with a two million pixel digital camera and multimedia entertainment functions. The company said that its current new product development efforts indicate that color monitor and camera as well as multi-media features in cell phones will be the reason for users in the next wave of massive replacement of handsets. The company expects these products to contribute about $100 million to its sales revenue and gross profit of about $416 million for the second half of 2005.
Media, Gaming and Entertainment
- Focus Media Holdings and eBay's wholly owned subsidiary Kijiji.com announced the establishment of a strategic partnership in Shanghai. Following the agreement, Kijiji.com's classified advertisements will appear on Focus Media's LCD in Shanghai as of mid-November this year. Focus Media operates the largest out-of home audiovisual advertising network in China. As of the end of March 2005, Focus Media was operating more than 16,000 LCDs in 22 cities in China. China's classified advertisement market is reported to be worth Rmb30 billion ($3.7 billion).
- China's Langchao Group said it is expanding its software development outsourcing business in Japan. The Chinese firm is doing this expansion through an agreement on software development outsourcing with Tokyo software firm Base. Through this partnership, Langchao hopes to increase software development for large companies that it says it would difficulty attracting while it is still solidifying its operations in Japan. Base, for its part, is aiming to expand business in China and hopes to develop software development from the Chinese government through the Langchao Group. The two companies are said to be thinking of a capital tie-up in the future.
- China Paradise Electronics Retail., known as Shanghai Yongle, announced that it has raised $132 million in its initial public offering after selling stock near the top end of the range offered to investors. According to the company's prospectus, China Paradise attracted investors eager to have a share of the high growth of China's retail sales of electrical and consumer electronics products, which are valued at Rmb518.4 billion ($64 billion). The company is raising funds to open new stores and purchase inventory. Morgan Stanley will own 21.4 percent of the company after the IPO, while public investors will take 25.2 percent. With 92 stores in 34 Chinese cities last year, China Paradise's profit last year surged 44 percent to 212.3 million yuan ($26.2 million). Morgan Stanley and Cazenove Asia. arranged the initial share sale.
- Cisco Systems, a network equipment maker, announced the opening of an R&D center in Shanghai. Representing a $32 million investment by Cisco over the next five years, the center will focus on 3G telecommunications networks. It will concentrate on R&D work on voice-related technologies first, followed by network solutions for small and medium-sized companies and home users.
- Weida Communications, a US company providing satellite communication services throughout China, disclosed that it has targeted the more than 200 million students in China's colleges and high schools for its satellite TV programming and internet access services. The company noted that there is little domestic content of interest to the youth market, ages 15 to 23. Weida said it has retained the services of a leading expert on the educational system in China to help it create links to students, student organizations and educational institutions in the country. Weida Communications provides data communication services via satellite to businesses and government agencies throughout China.
- Nokia and Television Broadcasts, the free-to-air television station, are said to be engaged in a talk regarding the pilot of a handset television service in Hong Kong. Under the partnership, TVB, using the digital video broadcasting-handheld technology (DVB-H), will beam its digital channel signals to dedicated Nokia handsets. Mobile operators will then charge users and share the revenue with the station. To run the trial, the station has to apply to the government for spectrum. Nokia is pushing the DVB-H standard and has entered into partnership already with various European operators. With the government expected to make a decision by the end of this year, TVB and Asia Television are still waiting for government approval for their digital terrestrial broadcasting business plans. Mobile operators around the world are looking to mobile television services to develop new revenue streams amidst the intense competition that is pushing down traditional voice and data tariffs.
Media, Gaming and Entertainment
- Media analysts predict Hong Kong advertising revenues to post a slower growth next year. Industry analysts expect the rate plan of Television Broadcasts to grow by less than the 10 percent growth targeted for this year. Analysts estimated the local advertising revenue of TVB to post a 7 percent growth this year and 5 percent next year. With television's just over one-third share of total advertising spending, analysts are looking to the cutbacks on growth in television being allocated to new free dailies.
- CDC Corporation, an enterprise and software solutions firm and the owner of China.com portal, announced the launching of a subsidiary, which is to be called CDC Games Limited. Specifically focusing on online gaming in Asia, the new division will combine MMO provider 17 Game, which runs the hugely popular Chinese MMO Yulgang, and the recently acquired casual gaming portal Gametea, which charges customers through virtual game merchandise. Yulgang made it to the news when it hit a record high of 246,000 concurrent users during peak usage periods and posted 9.8 million registered accounts. Despite its massive following, it does not use the subscription model, and remains a game free to play. What it sells are the value-added virtual merchandize and services from its online game shop. Already popular in South Korea, this online game funding method has just been introduced to China.
- Hutchison Telecommunications International revealed its plans to secure a $1 billion loan to be used to fund expansion in India, Indonesia and Vietnam. The money will refinance a one-year loan made during Hutchison Telecommunications' IPO. ABN AMRO, Calyon, HSBC, Standard Chartered and WestLB will lead the loan, according to undisclosed sources.
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