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Asia and Pacific Region Forum

Why is Yahoo so successful in Japan?

 7:50 am on Sep 7, 2006 (gmt 0)

Yahoo's market share is lower than Google in many countries except Japan.

Are there any secrete factors contribute this unique phenomena?

Why Google can not excel Yahoo in Japan although Google has been in Japan for 5-6 years.

What key successful factors should be learnt from Yahoo Japan?



 9:17 am on Sep 7, 2006 (gmt 0)

This is an interesting topic and it comes up from time to time...
One of the biggest factors was timing. Yahoo got here first and made its brand synonymous with the Internet. I haven't asked around recently, but there was a time where I had to argue with people to convince them that Yahoo was not a Japanese company. Mr. Son and SoftBank did a great job localizing and marketing Yahoo in Japan. They did such a good job that many people thought that Yahoo was the Internet.

Google is a late comer to the market and they are not as visible to the public. Sure there is some word of mouth notoriety, but nothing compared to the public awareness of Yahoo. One of the biggest ISPs is the YahooBB [google.com] brand. All of this market awareness works very well in Japan.


 3:42 am on Sep 8, 2006 (gmt 0)

Does it mean localization is very important for a foreign SE entering Japan?

How do you think of the future of Google Japan?


 5:37 am on Sep 8, 2006 (gmt 0)

Not really. Localization is a necessity, but neither Yahoo or Google were Japanese companies. I would say that they are both sufficiently localized nonetheless.

I think it can be said that there is often more brand loyalty in Japan than other markets. There is a big advantage to being the first to market here. If you can build up a loyal base there is a real brand adhesiveness in this market. That's good for the front-runners, but can be bad for latecomers in many cases.


 11:37 am on Sep 11, 2006 (gmt 0)

i think one of the important points to remember is that yahoo is a portal, google is a search engine. it is a bit like comparing apples and pears. often our sites report better conversions from google than yahoo, even though visitors (and time spent on site) may be the opposite.

i often get the impression that people use yahoo to be entertained or to "browse"; they hang around, click a few links, check out some news/entertainment/do a search or two, while people use google to search for hard information/facts/services. they are not "browsing" in the grammatical sense of the word on google.

a portal serves up information "in your face", so you can in fact "be entertained", while a search engine forces you to take the lead, you have to ask it a question. what if you don't have a specific question at the time? the portal is where you are going to go. Goo was a native japan engine that started out like Google, as a search engine rather than a portal, but it never really took off.

are the Japanese more browsers than searchers? as a gross cultural generalisation, i would say maybe. a portal is much like a magazine, you can flick throught the pages, skim read and look at the pictures until you find something of interest. pop into a bookshop in japan; the magazines are always on the first floor by the front door, the books upstairs somewhere!


 11:55 am on Sep 11, 2006 (gmt 0)

uk bookshops are, similer


 12:40 am on Sep 12, 2006 (gmt 0)

You raise some good points a2ztranslate.
However, in today's market Yahoo and Google are probably closer than you say. It is getting harder to say that Yahoo is a pure portal while Google is pure search as the lines are blurring now.

For instance, Google Japan got a lot of its initial market exposure in Japan by powering the search engines of portal sites, including Yahoo Japan. A healthy percentage of my Google Japan traffic still comes from Google powered portals like Goo, BIGLOBE, Infoseek, OCN, Excite, Dion, Cybozu, AOL and the like.

Also it could be argued that Google is becoming more portal-like itself. Not all of the features available in the West are available in Japan yet, but they're coming. Google's recent calls for more Japanese engineers also signals that they will be adding more and more portal-type services to the site. It's getting harder to say that Google is just a search engine.

The all encompassing portal site has always played a big role in the Japanese market. Consumers prefer knowing that all their services are being handled under one roof. Google didn't really buck that trend, but rather they used their best strength to complement the portals. By offering superior search services they were able to make a big entry into this market that would not have been as successful without the portals. However, their position now is much different than it was 5-6 years ago.


 2:31 am on Sep 13, 2006 (gmt 0)

Thanks a lot!

Do you think Asian users favor portal and internet community?


 2:56 am on Sep 13, 2006 (gmt 0)

hi bill, yes you have some points there. i noted on another post how you commented on yahoo having its ISP/VOIP/telecommunications services as well. i think this just helps to keep the customer in the Yahoo loop so to speak. one wonders if softbank/vodafone will adopt the same strategy and develop their own one stop shop for all internet/communication needs, as it has worked so well for yahoo.

i would love to source some accurate information on user profiles and user actions comparing yahoo and google in japan (e.g. % of searches that result in a purchase). i still have a feeling that people who want to access hard info or purchase are more likely to use google.

as an example here in new zealand MSN is teamed up with the biggest ISP (xtra); it is meant to be on of the most visited sites in new zealand. yet MSN traffic to our sites is next to nothing, even with excellent (top 3 in most target keywords) rankings. i guess it is a case again of people using different sites for different purposes, people catch up on the news and gossip etc. on msn but still reverting to google for searching for things they actually want.


 5:20 am on Sep 13, 2006 (gmt 0)

Do you think Asian users favor portal and internet community?

That does seem to be the lasting trend I've seen in Japan. The bigger companies have a tendency to offer as many services as they can to retain the visitor. From the customer side they get the feeling that this is a large secure system in which I can trust, and where I can take care of all my online needs. The portal site gets stickiness for its visitors and more use of their system, which should mean more revenue for them.

That model is common in Japan, not just on the net but with household goods, electronics, insurance, etc.

one wonders if softbank/vodafone will adopt the same strategy and develop their own one stop shop for all internet/communication needs, as it has worked so well for yahoo.

It's interesting that they went with the SoftBank name rather than Yahoo. A lot of people were almost certain that the Vodaphone company would become Yahoo. It's already been announced that the new mobile phone company will provide Yahoo content (big surprise). But given the public drubbing that Vodaphone service has been receiving of late it may not have been a bad idea to keep these brands separate. It's very possible that Vodaphone purchase will be a real thorn in the side of SoftBank for years to come. Their stockholders already think it was a bad idea. Time will tell.

Yahoo mobile already has a good deal of the portal's functions available for the Japanese mobile phone. You can already do just about everything you can think of on the portal via your mobile phone. Yahoo is way ahead of Google in this area.


 10:21 pm on Sep 13, 2006 (gmt 0)

i was amazed when back in Japan earlier this year the sea change in people's mobile phone "manners" (i love the term "manner mode"). these seem to have evolved rapidly and now no-one talks on their phone any more on the train or bus etc. when i left japan in 2000 it was the exact opposite, you'd get on the subway and half the carriage would be chatting away on their mobiles. now everyone is busy emailing or browsing on those great big mobile phone screens.

as you mentioned, the provision of an all in one service is so important in japan. every company i worked for there put just as much (if not more) energy into extracting every last yen out of existing clients than recruiting new clients. a good lesson learned.


 12:22 am on Sep 14, 2006 (gmt 0)

A lot of portal sites tried to do this (service all their customer's online needs) in the early Internet days in Japan. However the bigger portals that did a better job, like Yahoo, were able to grow market share while later market entries like Excite and Lycos were playing catchup with second-rate offerings. In a lot of cases it was the quality of the service offered, but in a lot of cases it seemed that it was just because Yahoo got there first.

On the other hand, a lot of specialty houses were able to offer focused services that were clearly superior to the portals. Surprisingly even some of these services lost out to the portals. The portals' ability to offer all the additional services was enough to retain customers in a lot of cases.

"manner mode"

I was similarly amused when I first heard that one. I was also surprised by the fact that few people seemed to use it at first. It wasn't until after several years of train and bus lines posting large signs ordering people to turn off their phones that any reduction was noticeable. It is increasingly common to see "no-keitai" signs in restaurants, hairdressing/barber shops, hot-springs, public baths, health clubs and other public places. They're starting to get the message. ;)


 12:30 am on Sep 14, 2006 (gmt 0)

First mover advantage was huge for Yahoo in Japan.

Additionally, competitors were very poor at marketing. AOL Japan was never as effective at marketing here, I was never once carpet bombed by their sign up CD. Compare this to Yahoo. Someone at Yahoo had the brilliant idea to sign people up and give the broadband router to customers on the street, even before the service in the area was sometimes available! It took months, maybe even a year, for competitors to copy this technique. Yahoo was able to get millions of people to use their portal, many 1st time internet users by offering this cheap ADSL service. Because they went right to broadband, they haven't had the churn of other providers.

Getting off topic but "manner mode" on trains in Japan: I sometimes see train ticket checkers telling people to turn off their phones if they are chatting on them. So I think it was more enforcement than signage that caused the change.
Email is accepted and ignored by the conductors, despite signs saying it will disrupt pacemakers....

[edited by: David_M at 12:38 am (utc) on Sep. 14, 2006]


 3:18 am on Sep 14, 2006 (gmt 0)


neither Yahoo nor Google were Japanese companies. I would say that they are both sufficiently localized nonetheless

But I can't see Google Japan is that different from Google in other places, so how to understand its localization?


 8:05 am on Sep 14, 2006 (gmt 0)

But I can't see Google Japan is that different from Google in other places

Google Japan has a full Japanese language interface. Advanced search, Local search, help menus, Services and Tools have all been done in Japanese. That's stage one of the localization. The next stage of localization focused on specializing all of these services and tools to the Japanese market. For instance, the Japanese mobile search offerings are made for Japanese phones. University searches are focused on Japanese schools. Local News is focused on local media. Etc.

Google Japan has its own Research Center where products and services specifically for the Japanese market are developed.

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