With Facebook still on the rise in Japan, things are only going to get tougher for domestic social network Mixi (TYO:2121). And while the company has been making efforts to adjust to the changing internet climate, today the company announced that it will fold two such efforts.

We previously wrote about the company’s subscription commerce initiative Petite Jete, a members only fashion site that charged young women a fee to receive selected items of clothing by mail each month. Mixi had limited the membership to 1,000 users at the beginning, but regrettably they didn’t have to worry about surplus demand, and IT Media reports that the service only mustered a few hundred users.

The other Mixi property that will close is smartphone avatar community Mixi Park. That service was opened last September in cooperation with Konami (NYSE:KNM) ¹, who planned to use it as a platform for games. But like Petite Jete, this venture didn’t quite go as expected, and the users accumulated were far less than originally hoped (although specific numbers were not disclosed).

Mixi Park will stop selling its Premium P Coin virtual currency at the end of January, and close the service entirely on March 31. On April 1st, they will refund remaining virtual currency to users. More details are posted on the service’s app pages (iOS, Android).

Mixi Park, closing soon

Tokyo-based startup Kamado Inc., which is running several web services including auction site Livlis and a photo curation site Clipie, was today acquired by Mixi (TYO:2121), Japan’s largest social network. The acquisition details haven’t been disclosed.

Kamado was launched in 2010 by Yuichi Kawasaki, the former vice president of Kyoto-based web juggernaut Hatena. Mixi is now thought to be struggling to find new monetization models, as it has 14 million users but is falling behind Facebook in terms of user activity. With this acquisition, Mixi is expected to gain some firepower in its service planning, and in its business development for smartphone-focused services.

Japanese social giants Mixi (TYO:2121) and DeNA (TYO:2432) announced today that they will form an alliance that will see their respective gaming networks share the same game development platform.

This will go into effect in January, at which point developers will be able to use a single platform to develop and distribute games to both the smartphone version of Mixi Games and DeNA’s Mobage network.

Mixi currently has 14 million users, a figure which has plateaued in recent months. But the portion of people accessing the network via smartphones is growing, sitting at 8.63 million for the month of September.

Whether or not it can continue to grow at a significant pace is another question, but with decent games offerings it should stand a chance. In the chart below, you can see a clearer picture Mixi’s smartphone adoption over time.

DeNA’s Mobage network, meanwhile, has over 45 million registered users and over 2,000 game titles under its belt.

This is not the first time that Mixi and DeNA have joined forces. Back in January of this year, the two companies got together to announce an e-commerce partnership.

[Download image version of chart]

The September collection, from Petite Jeté

Mixi (TYO:2121) has finally launched its Petite Jeté subscription-based, fashion e-commerce service in Japan, which it teased about a month ago. And we now know a little bit more than we did before, including the monthy fee which will be 4,200 yen (or about $53). Delivery is free [1].

Now while $53 dollars may sound a little high, the 4,200 yen monthly price doesn’t seem so high, at least not from my point of view living here in Japan. The items, which will be mainly ‘tops’ (i.e. shirts and blouses) are made in China, and users will be given an option of five items (each in two colors) every month.

Users can choose from the monthly collection, which is released at the first of the month [2]. Interestingly, if you don’t see anything you like, you can opt to skip the month and you won’t be charged. If you aren’t a fan of this ‘choosing’ racket, you can also just set it to ‘recommend’ and receive Mixi’s recommendation.

To start the service will send clothes in one size (‘free,’ or one size fits all), but Mixi will consider adding new sizes later. One added benefit that subscribers will receive is a ‘style card’ with each item that advises how to coordinate with other items in your wardrobe.

It’s an odd business for Mixi to get involved with, but given that the Japanese yen is so high, its probably not a bad time to be importing from China and selling to Japan.

[Source: Yahoo Japan]

Yesterday Japanese social networking giant Mixi (TYO:2121) went live with a teaser page for a new subscription-based e-commerce service. It’s called Petite Jeté, and it will be targeting women in their 20s who are interested in fashion, according to Fashion Snap citing a Mixi representative.

The teaser site doesn’t have too much information, but from what I can gather, the service will be limited to 1000 people to start with, charging subscribers a fixed rate in exchange for fashion items, ostensibly on a monthly basis.

Petite Jeté is scheduled to start in September, and if you’d like to join, you can register your email over on the teaser page.

Subscription commerce is a pretty fascinating business model, and its interesting to see Mixi give it a try, even if it appears to be on a very small scale to start. And this is certainly something that Mixi could push to overseas buyers if it works out. On a smaller scale, we have already featured subscription service startup Sugo Toys Japan which will soon try to sell Japanese toys to overseas users, and then there’s CandyJapan which exports fun Japanese candy for a monthly fee.

As for the rest of Mixi’s business, the company saw increased sales and profits in Q1 2012 compared to the same time a year before (Serkan Toto elaborates on this here). But as you can see in the chart below, Mixi’s monthly active users have long since plateaued [1]. With a population like Japan, there’s only so much you can grow as an internet company (in terms of user acquisition) without looking to overseas markets — something which Mixi just hasn’t done. [h/t to Masaru Ikeda for pointing out this story]

[Download image version of chart]

There’s much discussion going on today about a Nikkei Business Daily report that says Mixi’s founder and CEO, Kenji Kasahara, is considering selling his 55 percent stake in the company. Mixi (TYO:2121) was very quick to issue a response on on its website, saying that it the report that Mixi was considering selling itself is not true.

It should be noted that Nikkei Business Daily is somewhat hit-and-miss, serving up more than a few juicy rumors that have proven not to pan out, such as the rumor last December of a 4G LTE iPhone coming to Docomo. But given the fact that Mixi has been floundering over the past year.

Indeed, as many as 44 percent of its users now could be so-called ‘ghost users’ who don’t log even log in once a month, as you can see in the chart below from news.livedoor.com [1]:

From: news.livedoor.com

The Nikkei report says that mobile gaming companies GREE and DeNA are to make bids for the CEO’s stake. Serkan Toto has a good rundown of the situation over on his blog, and comments on this possibility:

What’s interesting for both companies is that Mixi is clearly a mobile social network, as over 80 percent of their roughly 30 billion page views come through mobile devices. Another example: the number of smartphone MAU shot up from 3.8 million in July last year to over 7 million in March 2012. Games on Mixi, however, have been a disappointment, financially speaking.

Serkan also notes that Facebook would be unlikely to be interested in Mixi, and we agree given that Zuckerberg and company don’t appear to be having difficulty building a user base in Japan (see Social Bakers for the latest stats).

While there might not be anything to this particular report, the fact remains that Mixi has been more or less treading water for a year. And as more successful social juggernauts continue to float on by, it only makes sense that Mixi make a move soon or else begin to sink.

Instagram has just updated its popular photo-sharing app, bringing with it support for Chinese microblog Sina Weibo, as well as Japanese social network Mixi.

When we saw Instagram’s Kevin Systrom talking in Beijing last year, he said that his company was looking into adding Sina Weibo integration, so this isn’t too much of a suprise.

Once you’ve updated the app to version 2.2 – here’s the iTunes store link – you’ll see the new Sina Weibo and Mixi sync options (if your language is set to Chinese or Japanese under ‘Region Format’) in the settings pane under Profile > Edit Sharing Settings.

For Mixi this is a big plus since the service has plateaued of late in Japan, hovering around 15 million monthly active users for almost a year now. The company has been brushing up its smartphone UI, and expanding its game offerings — but allowing users to post photos from Instagram is a good way to boost activity on Mixi without users actually having to be on Mixi.

As for Sina Weibo, it comes very late for most users, who already have plenty of other home-grown photo-sharing apps – which, personally, I think are more versatile and better localized – available, and which work on both iPhone and Android.

With contributions from Rick Martin in Japan.

[Sources: Instagram blog, via The Next Web]

There have been a flurry of financial reports over the past week, giving us insight not only into whether or not companies are profiting, but also how they are growing – and in the case of GREE, DeNA, and Mixi, fighting for the the attention of users. I’d prefer not to compare their users directly, because after all two (GREE and DeNA) are mobile social gaming players, and Mixi is a social network [1]. And while there is certainly some business overlap between the three, I’d like to just take a look at the trends surrounding each of these Japanese juggernauts.

Japanese social network Mixi (TYO:2121) has announced its Q3 2011 report [2], and since we last looked at the company’s user numbers, it seems that its growth has hit a distinct plateau since early last year. Expert on all things social on the Japanese web, Serkan Toto, who we interviewed on stage at our recent Startups in Asia event, finds it interesting that the network has stayed above over 15 million, in the face of challenges from Facebook and Twitter.

Mixi has been trying to fit itself into many of the businesses where its competition has succeeded, for example rolling out Facebook-like pages this past year (now more than 160,000 in total), brushing up its smartphone UI, and expanding its games offerings. Mixi also recently cooperated with DeNA in a social commerce partnership.

GREE’s (TYO:3632) most recent user numbers are nearly at 190 million, although the majority of that is Open Feint which it acquired last year. In Japan, GREE says its users are 15.3 percent of that total, putting them in the ballpark of about 29 million. This is according to GREE’s most recent published data [3].

GREE of course is growing globally, with nine offices opened around the world. Net sales are at about $539 million according to its Q2 FY2012 financial report, up 190 percent on the same time last year.

Meanwhile DeNA (TYO:2432) just reported that its Mobage social gaming platform has reached nearly 36 million users. While I don’t have monthly user data for Mobage, you can get an idea of the platform’s long-term growth in the chart below. Like rival company GREE, DeNA has been expanding abroad with a number of global subsidiaries and partnerships. Note that the figures below don’t include Mobage Global or Mobage China, nor does it include Ngmoco’s Plus+ network.

As for profit, the company reported about $448 million in net sales for the quarter ended December 31, 2011, which is a 16 percent improvement on the year before [4].

How are foreign players Facebook and Twitter doing in Japan? Currently Social Bakers puts Facebook user numbers in Japan at about 6.8 million, but the social network is growing very fast, which should perhaps worry Mixi more than anyone else. As for Twitter, it has a much firmer foothold having started in Japan far earlier than Facebook. French company Semiotics estimates that Japan is the third most populous Twitter nation with about 30 million user accounts.

The strength of Mixi is its real life social graph that extends over 25 million users as of September 2011. According to Mixi, people in their 20s account for about 50 percent of its total users. That breaks down to 29.3 percent for users age 20-24, and 22.1 percent for users ages between 25-29 (see interactive chart below). Most active users access Mixi from mobile which accounts for a whopping 80 percent of the total traffic.

DeNa (TYO:2432) is no stranger to online shopping, as it operates a huge shopping and auction website called bidders. It sells over 8 million items ranging from fashion, cosmetics to gourmet. Bidders is available for featured phones and PCs, and is also optimized for smartphone as well. It allows users to shop using points and coins collected from the gaming platform Mobage.

Even with the rise of Facebook and Twitter, when it comes to friendships based on real-life relationships in Japan, Mixi is still without a doubt THE social network. It is having difficulty with retention of users due to new and more open competitors though. But for younger generations, it is still a place where they exchange messages everyday with friends.

The biggest annual campaign thrown by Mixi is its “mixi christmas” campaign, where users ring each others Christmas bells to earn points which allow them to decorate their Christmas stockings and win presents. The 2010 campaign gathered more than a million mixi users within 58 hours of release, and the total number of users surpassed 3 million within 25 days. But one challenge for mixi is the lack of buying experience by the users, who are not used to spending money on the site. Hopefully this new partnership with DeNA will help to solve this issue.

Planned for late March, the two companies will open an online mall within Mixi. Prior to it’s release, big companies such as Lawson HMV entertainment, Sanrio (famous for Hello Kitty), and Cecil McBee (a very popular apparel brand that can be found in 109 stores in Shibuya) have already signed up to join the mall.

[Related: For more about Conit, see some of my stories on Asiajin.]

With this acquisition, the start-up is expected to accelerate Mixi’s efforts developing smartphone-enabled services and improve its smartphone app usability. We also remember, in September, the company acquired Naked Technology, a five-year-old Tokyo tech start-up with many talented smartphone app developers and engineers. The terms of the both deals weren’t disclosed.

Meanwhile, GREE was also busy this week picking up a smartphone app developer over their own, acquiring Mars ltd. Like Conit, Mars is a Tokyo-based tech start-up, and it is known for having developed a virtual pet game called Megu.

In Silicon Valley, we hear lots about larger tech companies struggling to find new talent. Many end up acquiring start-ups simply to bring in quality people, rather than the service that they might have built. This trend appears to have spread across the Pacific, as we’re currently experiencing it here too.

In fact Comnico Inc., a Tokyo-based company with about 18 staff, does all kinds of social media work in Japan, ranging from Facebook to Twitter campaigns to planning Ustream live-stream events. Comnico has prominent clients like JAL, Citreon, and Otsuka (makers of Pokari Sweat).

One of its most notable campaigns kicked off this past September, a Facebook promotion for Puma called ‘One Click To Jamaica.’ This was a slick game that lets the user run in Usain Bolt’s shoes for a few fleeting seconds, clicking as you cross the finish line to see how close to 9.58 seconds you can come. The campaign runs until November 11, so feel free to give it a try.

I spoke with Comnico’s CEO, Masayuki Hayashi, about his thoughts on recent changes in Japan’s social media landscape and what he thought about Facebook’s rapid rise. He explained:

Comnico CEO Masayuki Hayashi

The hot platform is Facebook, that’s for sure. In just this week we’ve had more than ten new inquiries from different clients about Facebook. So it’s kind of booming. Some people say there’s kind of a Facebook bubble — maybe — but users are growing, and I’m sure that Facebook will be kind of a base influence for social media in Japan as well.

Masayuki remarked that Twitter is very important too, but it has a different function:

If you want to [disseminate] information in real time than Twitter is better. But if you want to stock your fans, then Facebook is preferred.

As for home-grown social media service Mixi, he says that he would like to support the new Mixi pages. As far as demand goes, he says (with a smile) that there is “some interest.” How will Mixi fare versus other social media competition? Masayuki says that Mixi will survive, but their role is different than Facebook. “Facebook creates a type of social graph, but Mixi is more for interest graphs among groups,” he noted.

Right now Comnico is serving the Japan market only, but is considering expanding to Asian countries in the future. The majority of its shares are held by internet service provider Nifty Corporation (TYO:3828), with whom Comnico is working with to accelerate its business. Nonetheless, Masayuki says that Comnico would like to stay independent and retain its ‘venture spirit’ moving forward.

Mixi has a fresh new logo too (Photo: techwave.jp)

Japanese social networking site Mixi followed the lead of Facebook today by launching public pages for companies and individuals. ‘Public’ is an important word here, since Mixi usually requires a login to view content, so these new pages will be accessible by anyone, and by search engines too.

The new pages are said to bridge the public space on the net with Mixi users’ private social graph. And companies will will be sure to try to capitalize on the new feature. Disney is one company already on the bandwagon. A survey of some Mixi users earlier this summer by Adam Acar seems to indicate that users are ready to follow their favorite brands on the platorm too.

Nevertheless, it does seem very much like a ‘me too’ shift for Mixi, as Facebook is just starting to make inroads in Japan. According to SocialBakers, Japan is just approaching 5 million Facebook users, but it looks to be growing quickly. Take for example, the city of Takeo which creatively shifted its entire municipal government website to Facebook. That’s far from commonplace in Japan, but we thought it was pretty fascinating.

According to Mixi’s recent quarterly report, it has over 15 million active users right now (see chart above), but its growth rate doesn’t quite seem to have the upward trajectory that Facebook has. Then again, that’s no easy feat.

Twitter user @takumeister expressed his thoughts on the new Mixi pages in a clever posting which we’ve included below. I wonder how many other Japanese social media users feel the same way?

[Photo: techwave]

Tencent gamers have news to be happy about today — Zynga’s CityVille is about to become available in simplified Chinese and will be hosted on Tencent’s Pengyou.com platform. The new localized initiative in China will be called Zynga City – a smart way to get Chinese gamers familiar with the Zynga brand. Other Tencent platforms like QZone will follow suit in the near future. Zynga’s full announcement is below, but here’s an excerpt of how Zynga City will attempt to localize:

Zynga city will include brand-new decorations and architecture the Chinese audience can identify and connect with, in-game events and competitions linked to Chinese holidays and news, as well as culturally relevant game mechanics including the feature for players to send street peddlers to their friend’s cities. Zynga City will also feature an innovative quest system to satisfying Chinese players’ desire for rich storytelling within the games they love to play.

Tencent Open Platforms include Pengyou, Weibo, QQ games, QZone, and Q+ – which have a total of 600 million users, a big deal for developers who wish to target the Chinese market. Zynga was wise to jump on-board. In fact, this isn’t the first time that the company has made a game in Chinese. FarmVille in Traditional Chinese was the first, but it is hosted on Facebook mainly for Taiwan and Hong Kong users.

Zynga City Temple of Heaven

Zynga City Street Peddler

Cityville in Chinese is Zynga’s first real move in China. Back in April when we attended GMIC in Beijing, people questioned Andy Tian, the general manager of Zynga China, on the company’s ambitions there. Tian didn’t really give a direct answer and only said that the gaming company was in China doing research. Well, this Chinese CityVille move seriously didn’t come as a surprise given that Zynga had done “intensive research” on the Chinese market. Something was bound to happen.

It’s certainly a fascinating period to see how different companies are trying to tap on the Chinese market. GREE also made an agreement with Tencent, helping mobile game developers extend their reach to over 800 million users. mig33 developers could also do the same as it recently unveiled its developer program in Singapore last week.

This year also saw Zynga expand into India as well, hiring more staff for its Bangalore office as we previously reported. The company did face difficulties in Japan however, as its partnership with Mixi on Farmville and Treasure Isle fell flat.

Meanwhile, as the biggest western gaming giants look east (PopCap is exploring too), eastern gaming giants like GREE and DeNA are looking west. The globalization of the online gaming space is happening fast, and it will be interesting to see how the drama unfolds.

Zynga City

Zynga partners with Tencent

I conducted a survey here in Japan asking what people would do if Mixi started branded pages. As the graph below shows, 73 percent of the respondents showed interest in joining these groups. This ratio is quite encouraging, considering the fact that users are already receiving messages from brands on various platforms such as Twitter, emails and so on.

Question: If your favorite brands were allowed to have their own pages on Mixi, where they can provide brand information and coupons, how likely are you to join their Mixi groups?



What is more, when we correlated the intentions to join branded pages with a) Mixi usage frequency b) number of Mixi friends, we found that there were positive correlations, .19 and .22 respectively. What this means is, heavy Mixi users are more likely to participate in branded pages which is good for both brands and Mixi.

In the same study we also asked what people thought about Mixi’s recent move to remove ‘footprints’ on user profiles. For those who are not familiar with the issue, footprint is the note that shows who checked out one’s profile on Mixi. About 2 weeks ago, Mixi stopped showing this information to its users for some reason and we asked about the reactions. Unfortunately the majority of the users (64 percent) were against this policy.

Question: What do you think about Mixi’s recent removal of foot print policy?

We also looked at the gender distribution and it seemed like there was no difference among the genders in this negative attitude. Whether Mixi was aiming for more page views or not, this new policy sure did not resonate with its audience.

Methodology: A total of 121 college students in Southern Japan participated in the study in exchange for a class credit. Among the 121, 88 who indicated using Mixi were included in the analysis. The data was collected online via a password secured survey site. The study is still under way and Mixi questions are not directly related with the major purpose of the study.

Mixi is the biggest social network in Japan and it has always aimed to create its social graph based on real human-to-human connections. The folks at Mixi have kept silent for a while with no major announcements on this. But just a couple days ago, they sent out a PDF press release to us (in Japanese, see below), giving a hint on how the company plans to leverage its social graph for monetization.

In partnership with Nike Japan, this is Mixi’s first attempt at social advertising: an integration between online banner advertising and its social graph. The campaign is titled the “NIKEiD FRIEND STUDIO.”

NIKEiD FRIEND STUDIO

There are more than 100 products available on NIKEiD, a service which allows users to create customized products such as shoes and bags. With a banner generator on Mixi. Users were given their own iD to create an original banner with their very own customized product designed. With hundreds and thousands of such NIKEiD banners made by users, it brought tons of traffic to the official website.

Traditional online banner ads have received a fair share of criticism, and Mixi aspires to introduce new of online advertisements like this that leverage on its social graph. For users, the social banner provides another avenue to express themselves, sharing the products they like, and their style preferences with friends. If friends like what they see, they can click on the “Cool” button to vote for their friends’ banner ad, just like Facebook’s ‘like’ button.

Results

• Number of visitors to the NIKE FRIEND STUDIO: 2.13 million
• 80% of the visits were through clicking on a friend’s banner or social feed shown on their mixi page.
• Click Through Rate (CTR) for desktop computers is 11 times more than an average online banner. CTR is 16 times more on mobile compared to a regular banner.

Apparently Nike Japan is very much satisfied with the result of the campaign. Let’s hope we can get to see more of these campaigns by Mixi in the future.

Mixi Press Release

The Japanese online community has always been known to value anonymity. Past research also shows that when compared with Westerners, Japanese tend to have a higher fear of negative appraisal and low levels of self-disclosure.

To explore how Japanese online behavior impacts Facebook adoption, we have conducted two focus group sessions with 18 Facebook members who prefer to use the local online social network service Mixi. Our findings indicated that the biggest concern among these users is Facebook’s real name policy.

However, when asked if they would start using Facebook again if anonymity were allowed, most of the participants noted their reluctance because communication in Japanese was more convenient on Mixi.

Methodology

The focus group sessions were held at a public university in Southern Japan on June 1st and June 10th (6 and 12 participants respectively). The study was announced to the students via email where the participation criteria was “having an experience of using Facebook in the past but not currently using it.” All of the participants were college students majoring in  International Relations or English and given an extra class credit for their participation.

Below is the summary of our findings from the focus group sessions:

1. Facebook lacks basics in Japan

Studies show that there are four major factors that impact online social network continuance, namely:

• The platform is seen as more secure
• The platform has a better user interface
• The platform is perceived as more popular
• The platform is seen as a good source of information
• Sources/More readings: 1, 2, and 3

All of our participants agreed that Facebook is less secure, has a more complicated user interface, and is definitely not popular compared with Mixi (their preferred online social network). The users indicated that they prefer Twitter to gather information rather than Mixi or Facebook. Regarding the interface, participants evaluated Facebook as open, bold, and aggressive  – but also complicated and not “Japanese friendly.”

2. Real name policy is a problem, but not a huge deal

When asked if they stopped using FB because of its real name policy, a majority of the participants said yes. On the other hand, when we prompted if they would actively use Facebook if anonymity (kamei) were allowed, most of the respondents seemed reluctant. The respondents stated that Facebook was an international platform. To communicate with their Japanese friends, they saw Mixi as just enough, citing they see no additional value in Facebook. This is an interesting finding because all of the concerns users expressed about using Facebook were related with the real name policy.

3. The Risks of Using Facebook

a) Old friends, acquaintances, and co-workers can easily find them and ask to be friends. (For foreigners it might be easier to just reject the request but this seems very difficult in Japanese culture)

b) They might make a mistake when posting an update (One user mentioned how embarrassed she felt after wrongly posting a happy birthday message in English.)

c) Whatever they post on their walls might be irrelevant or bothersome to some of the members on the network.(Japanese are very concerned about not bothering others (Gomewakuo kaku)

d) Photo-tagging is an invitation for invasion of privacy. (They mentioned their uneasiness to use the tagging function because, even if that photo is seen by a friend of a friend, it still feels like a stranger is looking at their picture).

e) Sponsored stories without users permission is an invasion of privacy.

f) Facebook is an open door for spam and pushy marketing practices. (Users mentioned that they received a lot of spam and flirty messages from people they did not know. Some users also mentioned that their friends’ Facebook accounts were hacked and that this never happens on Mixi)

4. Additional Reasons why Facebook Goes Against Japanese Culture

(These are my personal observations and thoughts)

a) Japanese culture values harmony (remember the first sentence from each international marketing book about Japan (the nail that sticks out get hammered down). This makes it difficult to:

• Switch to Facebook if the majority is not using it
• Post forth an honest opinion that criticizes something or someone
• Reject a friendship request or delete a member who is not active any more (e.g. it would be extremely rude in Japan if a new employee rejects his superiors Facebook friendship request)

b) Japan has the highest risk avoiding culture. This makes it difficult to:

• Disclose personal information (posts, photos, videos, event organizing, user location). Less sharing means less page views, and that means less revenue for Facebook.
• Make friends on online social networks

c) There is high power distance in Japan. This makes it difficult to

• Share the same messages with senior co-workers, younger friends, close friends, acquaintances, and relatives at the same time.

d) Japan has a high need for escapism. This makes it difficult to:

• Communicate on Facebook facing real people, real names.

e) Japan has a high-context culture. The Japanese traditionally prefer face to face communication as online conversing might cause more misunderstandings. Although 95% of Japanese ages 18-49s had access to the internet in the past 10 years, Mixi (or any other social network) membership has always been about 25%. In other words, unlike foreigners, the Japanese do not have a burning desire to maintain relationships online regardless of their friends’ geographic proximity.

Other possible indications

a) Currently there are about 700 monthly searches for “how to quit Facebook ” on Google (Source: Google Ad-words). Having 700 of such searches in Japanese isn’t too cool, especially when we have such a small group of Facebook users.

b) Although currently there are about 3.7 million Facebook users in Japan, the number of active users is expected to be lower than that:

• There are two million registered foreigners who live in Japan which means only about 1.7 million of them are assumed to be on Facebook.
• The Japanese have smaller friend networks and do not share much information, which we can assume they do not have to log in as frequently as the U.S counterparts. (source/more reading: 1 )
• Many quitters do not cancel their Facebook account, for instance in our study 17 out of 18 users had kept their Facebook accounts even though they always used Mixi and did not like Facebook)

Conclusions

It seems clear that Facebook is not likely to pass a 10% user ratio (similar to Korea) because of the reasons explained above. However, this is still a pretty profitable situation for Facebook as the current 3.4 million Japanese users can bring substantial advertising dollars given that the total advertising expenditure is high in Japan.

Also, remember that last year Twitter made about three million dollars in Japan despite its lackluster financial performance in the U.S. On the other hand losing in Japan has some symbolic ramifications, since Japan would be the place where the astronomic FB growth would stop just like how the Ottomans stopped in Vienna or Alexander the Great got defeated in Egypt. In both cases the empires started to shrink…