Presentation of 9199 (“Quick”) Business Strategy
September 16, 2004 (STOCK CODE:9449)
‚f‚l‚n•E
Global Media Online INC.
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Presentation Program
Premise Part 1: What is 9919 (“Quick”)? - Making the Internet More Convenient and 9919 (“Quick”)!” Part 2: 9919 Business Strategy: Background - Market Entry Opportunity, and Details of Entry •@ •@ •@ •@ •@ •@
1. Search Advertising Market and Telephone Directory Advertising Market 2. Bringing Success in China to Japan 1. 9199 Business Strategy and KSF (Key Success Factors) •@ 2. Marketing Strategy 3. Sales Strategy 4. Product Strategy (“Key Word” and “Telephone Directory” Businesses)
Part 3: KSF (Key Success Factors) - Marketing Strategy and Sales Strategy -
Part 4: Sales Channels and Profit Structure Part 5: Summary of Strategy/Looking Ahead to the Next Term
These presentation materials include forecasts based on assumptions, predictions and plans valid as of September 16, 2004. Actual results may differ greatly from those forecast herein due to the risks associated with the global economy, competitive conditions, and exchange rate fluctuations, as well as unknown factors such a natural disasters.
•¦
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Premise GMO•@ “Internet for Everyone”
For personal users: “Providing user-friendly search services to men and women of all ages” For corporate users: “Becoming Japan’s Internet Division” •¨ Working towards a Japan in which all companies and businesses have a website!
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•œ
•œ
•yPart 1•z
What is 9199 (“Quick”)?
Making the Internet More Convenient and 9199 (“Quick”)!
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Service Outline
What 9199.jp (“quick jay-pee”) does for users... @• When Japanese is entered into the address bar of Internet browsers, ‡@ A search via multiple major search engine sites, including “Yahoo!” and “Excite,” is carried out simultaneously and instantaneously!
‡A Search results via multiple shopping sites (such as “Yahoo Shopping” and “Rakuten Ichiba”) and gourmet sites (“Gurunavi,” “Hanako.net”) can also be displayed with the click of a button! •@ ‡B Users can also search for—and even get coupons for—stores without a website by using a telephone directory.
Making the Internet more convenient and 9199 (“quick”)!
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About 9199.jp (“Quick jay-pee”)
‡@ Comparative search
Opening: Sunday, Sept. 19 at 9:00am
‡@ 9199 comparative search ‡A 9199 telephone directory ‡B Deployment of Group’s business resources
Search buttons (personal businesses)
‡B Deployment of Group’s business resources
Jword listings
‡A 9199 telephone directory @• search results
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9199 Comparative Search
When Japanese is entered into the address bar, a search is carried out simultaneously via multiple sites (such as Yahoo! And Excite)! In addition to general searches, one can also conduct exclusive searches for “shopping sites” or “gourmet information.” Comparison of search results is also super-quick! With the “9919 comparative search,” users can find what they’re looking for in the blink of an eye.
Portal site search results are displayed
Users can not only conduct several searches at once, but can also compare search results. Users do not have to go to the trouble of accessing each site.
Shopping: compare prices
Gather word-ofmouth information from message boards
Find information about bargains
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9199 Telephone Directory: What Is It?
•E Since data is screened by business category and location, users can easily search from among a telephone directory database of approximately 8.4 entries to find the company/store information (telephone number, address, map) they are looking for. •E Users can find addresses, telephone numbers, and maps of businesses that do not have websites. •E Unlike typical website searches, the conferring of coupons allows users to take advantage of direct sales promotions (telephone inquiries, promotions to encourage store visits, coupon distribution)! 9199.jp user 9199 telephone directory
Distribution of coupons Telephone inquiries Encouragement of store visits
Search traffic via both address bar and site bar
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9199 Telephone Directory: A Visual Explanation
9199 telephone directory basic information page 9199 telephone directory search results page
Enter key word in address bar
Jword search results page
The 9199 telephone directory search can not only be conducted from the top of the telephone directory page but—unlike other companies’ services—can also be accessed via the address bar and via the left screen search results. Thus, an even higher level of traffic can be expected.
9199 telephone directory coupon data page
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Business Resource Deployment via 9199.jp (1)
If the user clicks on the “To corporate users” corner located below the screen’s exclusive search button, a screen introducing GMO business resources appears.
Enlarged image
•¦
The design shown is provisional.
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Business Resource Deployment via 9199.jp (2)
The business resource categories are scheduled to be installed in the comparative search tab part of the “IT” business tab in the left screen.
Access Access Domains Domains Servers Servers
Settlement Settlement Security Security
Web Web Promotion Promotion Development Development Consulting Consulting
•¦ The design shown is provisional.
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•yPart 2•z
9199 Business Strategy: Background
- Market Entry Opportunity, and Details of Entry -
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Search Advertising Market and Telephone Directory Advertising Market
Entry into both the search advertising market—in which rapid growth is expected—and the still-huge telephone directory advertising market!
•i 100m JPY•j
2,500
Search ad market size forecast
(100m JPY)
2,000 1,800
Trend in telephone directory ad market size
2,000
1,600 1,400
1,500
1,200 1,000
1,000
800 600
500
400 200
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' 03 (est.) Listings 107
'0 4 '0 5 '0 6 '0 7 '0 8 (forecast) (forecast) (forecast) (forecast) (forecast) 311 648 1,069 1,715 2,281
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Tel. dir.
99”N 1,777
' 00 1,748
website data
' 01 1,652
' 02 1,559
' 03 1,524
Source: Mitsubishi Securities April 12, 2004 analyst report ¦•
•¦Source: Dentsu
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Bringing Success in China to Japan (1)
Success in China•i 3721.com••
http://www.3721.com/ 3721 Network Software Co., Ltd. Established in October 1998. In June 1999, this company launched the 3721.com website search service that uses Chinese keywords, which is now used by over 40 million active users over 50 million times a day. With the 8th highest Internet Traffic Ranking in the world •¦ , this service has become the defacto standard in Chinese language-based Internet access. •@ Over 450,000 companies throughout mainland China, Hong Kong and Taiwan have already paid to register keywords that relate to their companies and are using this service. In January 2004, the company became part of the Yahoo! Group. •¦ Based on the 3-month average rating shown on Alexa•i www.alexa.com•j as at August 22, 2004.
Yahoo Group)
8th in the world! Yahoo! Japan 9th Google (Japan) 36th Rakuten 60nd As of September 4, 2004
http://www.alexa.com/site/ds/top_sites?ts _mode=global&lang=none
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Bringing Success in China to Japan (2)
Supplying of 3721’s original technology
January 2004: buy-up of 3721
President of 3721 also acts as president of YAHOO! China JWord development and supply Permanent exclusive contract in Japan with 3721
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Bringing Success in China to Japan (3)
Capital participation in AccessPort Inc.
About AccessPort Inc.
•EHas exclusive use of China’s 3721.com original technology in Japan and offers “Jword”, Japan’s first Japanese keyword search system. Within two years of its launch, the service has attracted 17.6 million users (as at August 18, 2004) and is still expanding. Representatives: Weng Yongbiao and Shen Haiyin•@ Capitalization: 114.5 million yen (March 31, 2004)
Basic agreement reached to bring AccessPort Inc. into the GMO Group through a capital tie-up. The Group’s share is 40%; but through the adoption of a real rule standard, it will become a consolidated subsidiary by the end of the year.
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•yPart 3•z
KSF (Key Success Factors)
- Marketing Strategy and Sales Strategy -
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9199 Business Strategy and KSF (Key Success Factors)
Securing original technology
Making AccessPort Inc. into a consolidated subsidiary M&A strategy, taking on blog & other businesses: big jump in NetRatings ranking Large-scale promotion & marketing No. 1 in key word sales; Further strengthening of client service staff Key word advertising and development of “9199 telephone directory”
Capital strategy
Securing Internet traffic Popularization & promotion of plug-in usage Strengthening of client service sector Enhancing strength of product lineup
Marketing strategy
Sales strategy Product strategy
9199 Business Success
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Marketing Strategy (1): Huge Advances by Group Media
Via M&A and the synergistic effect of the JWord and GMO businesses, GMO’s media scale rose from no. 16 to no. 5!
End of December 2003•@
Ranking by no. of us ers
No. of users (1,000 people)
End of August 2004
Reach (%) Rank in PV Ranking by no. of us ers
No. of users (1,000 people)
Source: Nielsen//NetRatings Reach (%) Rank in PV
1.Yahoo ! 2.Rakuten 3.Nifty 4.MSN 5.NEC 6.Microsoft 7.SONY 8.NTT Com. 9.KDDI 10.Amazon 11.NTT-X 12.Asahi Net 13.Plala Networks 14.Google 15.Matsushita Elec.
22,824 16,409 14,690 14,383 11,963 11,789 10,078 9,734 8,359 7,613 7,214 6,977 6,626 6,305 5,839
79.75 57.33 51.33 50.26 41.80 41.19 35.21 34.01 29.21 26.60 25.21 24.38 23.15 22.03 20.40
1 2 4 3 6 29 8 11 16 13 9 30 7 5 33
1.Yahoo ! 2.Rakuten 3.MSN 4.Nifty
29,960 21,144 19,255 17,635
84.05 59.32 54.02 49.47
1 2 3 4
5.‚f‚l‚n
6.Microsoft 7.NEC 8.SONY 9.NTT Com. 10.Amazon 11.KDDI 12.NTT-Resonant 13.Asahi Net 14.Google 15.FC2 16.Plala Networks
15,531
15,063 14,665 12,576 12,111 10,215
43.57
42.26 41.14 35.28 33.97 28.66
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25 7 12 13 16 18 9 26 6 10 19
If AccessPort’s users are 10,206 28.63 included, GMO’s real 28.15 ranking 10,035 , ahead of is 4th 27.76 Nifty! 9,894
9,428 9,281 8,222 26.45 26.04 23.07
16.‚f‚l‚n
5,654
19.76
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Marketing Strategy (2)•@ Popularization of Plug-in Software
Jword service to be supported on 25 million PCs nationwide.
Around 1/3 of all PCs in Japan will support Jword.
Total number of Jword plug-in software installations as of August 18, 2004 : 17.6 million•@
•i persons •j
30,000,000
Jword Plug-ins – Cumulative total
•i persons •j 4,000,000
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000
Jword users
25,000,000
Expected to top 25 million by end of 2004
•i plan •j •i plan •j
20,000,000
Tops 10 million in August 2003!
15,000,000
10,000,000
5,000,000
Tops 15 million in April 2004!
1,000,000 500,000 0
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J un- 02 Sep- 02 Dec- 02 Mar- 03 J un- 03 Sep- 03 Dec- 03 Mar- 04 J un- 04 Sep- 04 Dec- 04
Sep- 03 1,389,000
Dec- 03 1,863,000
Mar- 04 2,481,000
Jun-04 3,587,000
Total plug-ins 400,000 1,662,000 3,772,000 5,810,000 8,050,000 10,710,60 12,460,00 14,892,03 16,687,36 20,343,86 24,818,55
No. of actual users
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Marketing Strategy (3): Usage Promotion and Promotional Campaigns
Due to the acceleration of plug-in usage and usage promotion, a large-scale promotional campaign is being planned. Some aspects of the large-scale promotional campaign plan As of 2004/9/9
•œ Magazine advertising •E Late Oct. – Mid Dec.: rollout of print ads and tie-up articles in at least 20 magazines •œ TV commercials •EPlanned from early Oct. 2004 (on national networks and local stations) •EGRP •@ A considerably large volume is planned. The usage of a certain famous celebrity has been decided. •œ Other •ECombat sports-related •@ Until the end of the year, rollout of the “Hustle series” and other ads is planned for ring corner posts, fight pamphlets, and ads in fight-related magazines and websites.
•E 25 million plug-in downloads by the end of the year •E Via usage promotion, acceleration in the number of users to 10 million by the end of the year!
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Usage Promotion and Promotional Campaigns (2)
(Example: Naoya Ogawa version, starting 9/19)
•EIf “Hustle” and a verb is entered into the address bar, Naoya Ogawa moves in accordance with the command given.
•@ ¨ This makes JWord plug-in users aware that they can access the site via the address bar, and instills the habit of doing this.
•¦ Since users cannot participate in this game if they do not have the plug-in, it is expected that this will lead to an increase in the number of JWord plug-in users.
Hustle! Hustle!
Programmed to respond to all types of commands—not only basic actions such as “Raise your right hand” and “Jump,” but also commands such as “Do an S.T.O.,” “Do an Osotogari,” “Eat ramen,” Smell your feet”! 22
Sales Strategy: Structure of Sales System
Build up a system comprised of 300 staff*. Target: Sales of ¥2 million per person.
•ƒ Trend in quarterly JWord sales for the GMO Group and No. of Sales Staff: Based on actual figures>
•i 10,000yen•j 30,000 •i Persons•j 40
35 25,000 30 20,000 25 15,000 20 15 10,000 10 5,000 5 0 0
March ' 03
3,509 3
J une ' 03
4,744 4
Sept ' 03
7,240 10
Dec. ' 04
8,879 13
March ' 04
17,941 20
J une ' 04
25,416 35
Sales Sales s t aff
*Including administrative staff.
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Product Strategy
Incorporation of a wide client base via “key words” and “telephone directory”
•ƒ Premier Key Words•„ •¡ Product value •1 slot for each premium key word •Helps to establish the company’s image •After 1 year, the company will be conferred preferential registration rights, increasing the likelihood of continued usage •¡ Types of Key Words General words (such as category names): e.g., Insurance, Autos, Securities, Translation, Airline tickets, Tickets, Job placement, etc. •¡ Unit price Premier key word Gold: ¥2,400,000/yr. Premier key word Silver: ¥1,200,000/yr. Premier key word Basic: ¥400,000/yr. •ƒ •¡ Regular Key Words•„ Product value •1 slot for each regular key word •Given on a first-come, first-served basis, as long as there is no infringement on another company name, product name, or trademark. •Rights to automatic renewal conferred at the expiry of the contract •¡ Types of key words Proper nouns (company names, product names, service names): e.g., ITOCHU Corp., AccessPort, Morning Musume, Clie, etc. •¡ Price•@ 1 word: ¥40,000/yr. (w/ tax: ¥42,000/yr.)
•ƒ
Telephone directory•„ •¡ Content Registration of basic info., carrying of coupons, Web link services, etc. •¡ Unit price From ¥30,000
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•yPart 4•z Sales Channels and Profit Structure
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Sales Channels and Profit Structure
Consolidated Gross Profit Margin: Approx. 70•“
Royalties and other costs: approx. 30•“
Cost
GMO Group
GMO Group Approx. 70%
(If sales are made directly)
AccessPort GMO Magclick GMO Communications
Agency commission: Approx. 25%
Agency
Consolidated Profits
Customer
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•yPart 5•z
Sales Strategy/Looking Ahead to the Next Term
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Summary of Strategy/Looking Ahead to the Next Term
Popularization of Plug-ins and promotion of usage (Marketing Strategy): Through large-scale promotion, the securing of
25 million plug-ins and 10 million active users!
•~
Strengthening of client service (Sales Strategy):
Client service backed by strong sales performance: a 300 people-strong sales structure by the next term!
•~
Strengthening of services and products (Product Strategy)
Targeting a wide corporate client base with the “key word” and “telephone directory” businesses
Next-term sales target: a ¥6 billion business!
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=
Internet for Everyone
Thank you.
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