Off-portal mobile sites in Japan see excessive growth

Japanese mobile content sites inside the walled garden of the official carrier portals have a tough time. Competition is severe and lots of free content is available on the mobile Internet not regulated by the carriers. The introduction of search engines has made it easier to find your favorite content. Over the past four years, many content providers and publishing companies have moved (part of) their content to the free public Internet.

Mobage Town is a good example of such an off-portal service offering games, social networking services and news. In April, Mobage Town had 10 million registered users and a total number of 15.6 billion page views were generated. It took only 2 years to reach these numbers.

We thought that setting up off-portal sites and making money was pretty difficult for non-Japanese companies wishing to enter this dynamic mobile market. In March we met Goal.com, a Swiss company providing soccer content on the web and mobile. In terms of page views and unique visitors, Goal.com is the world’s largest new media soccer news provider. It publishes 17 editions in 14 different languages – even a full Japanese version is available written by Japanese editors based in Europe. Joan Blaas, Vice President Mobile of Goal.com came to Japan for business development: ‘We launched our Japanese mobile site in November 2007, as of today we have more than 1 million page views a month,’ said Joan. We were not so impressed by this number. ‘Since the launch, we have not done any promotion for the site in Japan. My technical team in Europe has not even optimized the content for Japanese handsets,’ continued Joan.

Out of curiosity we took our phone and entered the URL m.goal.com in our browser. The site looked bad – images were very small and it took a long time to load. One million page views on such a site without marketing suddenly looked very good.

We advised Joan to get in touch with UBIT, a local mobile technology company that could help Goal.com with optimizing and testing the site on Japanese phones. The next step was to introduce Goal.com to Mobage Town. Within two weeks, Goal.com and UBIT adapted the site and the number of page views subsequently doubled in a month. Goal.com has plans to grow aggressively. ‘We went live with our content in Mobage Town, and expect to reach 4 million page views during EURO 2008, and aim to become the largest soccer site in 2009. With this traffic and focus on soccer, we are an interesting medium to advertise,’ said Joan. We agreed. Goal.com enjoys riding the off-portal wave.

Mobile Content Search – Can Niche Players Play A Role ?

Paid mobile search, advertising in which advertisers only pay when a visitor clicks on their ad or link from a search engine page, is rapidly gaining momentum. A small US startup company called MCN, headquartered in the west of Tokyo, between Shibuya and Ebisu along the Yamanote circular line, is one of the drivers behind paid mobile search. MCN started in 2004 in Mountain View, CA.

Last year, the business headquarters was relocated to Tokyo to be closer to the fast growing Asian markets. The research and product development team is still in Mountain View. The company already employs 50 people.

The challenge for mobile search is the quality of the search results. It often takes more than five clicks to reach the relevant content. Mobile users do not have the patience for this. Long click distances kill content discovery. MCN is changing this with allwords - its vertical paid search program. If the provider’s database contains content relevant to the query, it can be presented to the mobile users in a few clicks. 'We call this 'Search Merchandising' and we are driving the industry’s highest clickthrough and conversion rates for mobile content transactions. On music search, for example, our clickthroughs are approaching 50% and growing and our content
partners tell us our conversion rates are easily double those of competing systems' says Marc Brookman, CEO of MCN. Content providers are charged on a pay-per-click basis, similar to
Google’s Adwords, except that with allwords they don’t have to manage the complexity of bidding for keywords—they can buy all of the keywords in a given category (Music, Images, Games, Comics, Video, etc)..

In Japan, MCN has signed up with more than 30 content providers and 6 distribution partners and portals. Yahoo! Mobile Japan uses allwords. On the Yahoo! Mobile Japan top page, users can
click on vertical content channel links to browse to the music or comics or games pages where the content search is powered by MCN. After entering the key word, MCN connects the query in
real-time directly to multiple content provider databases, ranks the most relevant results into a ‘Top 5’ and returns actual content items, not just links, to the user to purchase the content.

MCN co-exists with the traditional search providers. Google and Yahoo are targeting big traffic customers with mobile search. Google provides its search engine to DoCoMo and KDDI. Their
search results are often not relevant for paid mobile content discovery, the niche market MCN has been growing in with its white label service. How long will it take before Google and
Yahoo adapt their search and business model for the mobile Internet?

Stay tuned.