Japan’s continuing influx of foreigners and what it means for YOU

Quiz time! What percentage of Tokyo is non-Japanese?

Answer: 2.93% – that’s the percentage of registered foreigners in Tokyo as of January 1, 2007 (an increase of 1.8% over last year), says Shukan Toyo Keizai. That means that 3 out of every 100 people you see in Tokyo are foreign (one of whom could be a white dude staring at the Daily Yomiuri [picture courtesy STK]). There are 371,000 registered foreigners among Tokyo’s overall population of 12.69 million. The information comes from a “population movement survey” conducted by the Tokyo Metropolitan Government.

white-dude-47_1.jpgTop nationalities:
Chinese – 126,000
Korean – 109,000
Filipino – 31,000

Most foreign districts:
Shinjuku-ku (where Tokyo’s Koreatown is located): 30,000
Adachi-ku: 21,000
Edogawa-ku (home to Indiatown in Nishikasai): 21,000

Tokyo’s foreign population has surged 2.5-fold over the past 20 years, going from a mere 150,000 in 1987 to the present 371,000 (18.5% of the estimated 2 million registered foreigners, or about 1.5% of the total population).

These numbers may just be the tip of the iceberg. The ‘registered’ foreigners are merely the people in the country legally for purposes other than tourism, some of whom are temporary visitors who have no intention of making a life here. But many do plan to (there were 349,804 permanent residents that are not zainichi Koreans/Chinese as of 2005). According to Immigration Bureau statistics, there were approximately 190,000 people illegally residing in Japan (presumably concentrated mainly around Tokyo) as of 2006. Though the number of illegal immigrants has decreased as controls have gotten stricter over the years, Japanese manufacturers have no intention of turning back from their use of cheap, often illegal, foreign labor to stay competitive as the numbers of Japanese workers decrease and fewer people are willing to take such jobs. On top of that, other industries, including the medical, restaurant, and agricultural industry are eager to expand their use of foreign labor.

While many of the legal immigrants were educated at least partly in Japan (and in the cases of Chinese and Koreans, their families may have been in the country for 3 generations or more) and lead normal, middle class lives, the conditions for illegal workers in Japan can be downright dreary. A recent government-produced documentary depicting the daily activities of immigration officials features a scene in which the “Immigration G-Men” break up a textile operation in a small Tokyo apartment that was making handbags for local consumption. The workers are Korean, speak poor Japanese, and look like they rarely leave their work stations. Even among legal residents of Japan, many are “trainees” at manufacturing companies whose “training” consists of full time work on an assembly line for low pay.

The regular publication of statistics like these, and the regular, adversarial reporting of developments in this issue, should remind the public as well as the authorities that real “internationalization” based on economic interests, rather than the abstract concept of peace, cooperation, and English study that is usually associated with that term, has already arrived in parts of Japan, making it necessary to adjust and respond. Recently publicized cases of some issues facing foreign laborers, such as abuse in the “trainee” system the difficulty that children of foreign residents face in getting an education, have resulted in increased attention by the authorties, and even some incremental reform. Justice Minister Nagase is heading efforts at the ministry to provide a legal framework to tap unskilled workers, a move that would give legal credibility to the current practice but at the same time would give the foreign workers rights and proper status. The Ministry of Education has begun requiring children of permanent residents to attend school.

These are necessary steps forward, but I feel like the current developments facing foreign residents in Japan have yet to receive the top spot on the agenda that they deserve. Back in 1990, Japan began a program to accept Brazilians of Japanese descent as temporary guest workers. I wasn’t around at the time, but it’s clear that the issue received very wide coverage that I think helped prepare people mentally for the small-scale but significant change in policy. Today, with the foreign population exploding (by Japanese standards), where are the public opinion polls, dramas featuring foreign laborers, rants by unqualified political commentators, etc etc?

Corporate-led Social Revolution

Generally, Japan’s immigration policies are much more liberal than the US – in the rare case that you speak Japanese fluently and have connections within the country. For the rest of the world, Japan’s immigration policies focus on attracting skilled foreign workers in areas such as computer programming where Japanese skills aren’t enough to meet demand. Some industries, meanwhile, are calling for an addition to that policy of allowing more low-skilled workers in to either fill shortages or drive wages down. The most recent victories for advocates of such policies were the “free trade agreements” signed with the Philippines and Thailand, which will allow foreign nurses and chefs, respectively, to work in Japan. However, the Japanese side insisted on language requirements that guarantee virtually no significant numbers will be let in.

This is a radical change for Japan, which has traditionally coddled its low-skilled workers with decent wages and living standards and kept out large numbers of non-Japanese foreigners. Like the US, Japan has a valuable currency and lots of industry, making it an attractive destination for low-skilled workers. Bringing in lots of foreign unskilled labor would make Japan’s immigration structure more like the US, which imports millions of unskilled laborers with poorly enforced immigration laws while making highly skilled jobs very difficult through unofficial barriers such as difficult licensing requirements and tight visa quotas. From the perspective of an average citizen who wants to see the best people in the right jobs, I would advocate opening up the books for all levels of jobs. The US situation is a nightmare for both the illegal immigrants from Mexico who have no prospects back home but must leave their families and live as an outlaw to support their families in the US, and the Americans who have seen low-skilled jobs with decent pay evaporate as a result of the immigration and outsourced manufacturing.

Japan, meanwhile, has relied almost exclusively on what the Japanese government coyly calls “international division of labor” and less on importing labor. Large Japanese corporations are major investors around the world, particularly in China and SE Asia, and employ hundreds of thousands if not millions throughout the region. This decision by the Japanese companies no doubt increases the supply of labor for the companies and allows them to save on wages. But Japan managed to avoid the US situation by maintaining stable employment in domestic industries such as service and construction, sometimes at the expense of efficiency or economic rationality.

But the business community has changed its tone over the years, and now the two top business lobbies, the Keidanren (made up of manufacturers) and Keizai Doyukai (a more brazenly neo-liberal group of top executives), are calling for massive importation of labor to avoid a drop in GDP due to the shrinking native work force that will accompany Japan’s population drop to 100 million by 2050.

No more – Economic analysts have been pointing out for years that Japanese consumer consumption is low relative to other developed countries, and that poor consumption is holding back Japan’s GDP growth. The low consumption is blamed on two factors – deflation that makes people delay large purchases, and stagnant wage growth – the latter of which Morgan Stanley economist Stephen Roach argues stems from the “powerful global labor arbitrage that continues to put unrelenting pressure on the labor-income generating capacity of high-wage industrial economies.” In other words, Japanese labor is in competition from foreigners, a prospect that means money for the global corporations but hardship for the domestic workers.

Japan’s media has been sensitive to this issue, if a bit reluctant to blame it on globalization. Economic disparity between the rich and poor (known succinctly as “kakusa” in Japanese) has been a persistent buzzword over the past 2 years. A host of phenomena – growing income disparity, the collapse of stable employment and the rise of fluid ‘temporary’ employment, a jump in the welfare rolls, the rise in prominence of a new wealthy class, the bankrupt finances of local governments, the near-collapge of the social insurance system, low economic growth for more than a decade, a shrinking/aging population, and on and on – have given average Japanese people the sense that the future looks rather dim.

Now the manufacturing interests, among others, are calling for more foreign labor to come to Japan, and as we’ve seen above it is on its way, putting perhaps more pressure on the average worker. But in my opinion this is only a problem if only labor is allowed to be fluid while corporations with stable management and shareholders reap the profits. Highly skilled laborers such as lawyers, doctors, professors, journalists, and especially corporate managers/investors should be allowed into Japan. Allowing a full spectrum of business opportunities into Japan, which with a highly educated population, peaceful society, and hyper-developed infrastructure, would allow for a wealth of more business and labor opportunities.

But of course that’s a silly proposition. The stewards of Japanese society will continue to hoard the top positions and continue making hypocritical appeals to racial harmony out of one side of their mouths when it comes to reform of corporate boardrooms while pushing for internationalization of cheap labor from the other side. Like it or not, the choice average citizens have is how to deal with the situation that’s been thrust upon us.

Where East and West meet

It’s easy to see a disconnect between, say, the interests of English teachers, IT workers, and businessmen that make up the bulk of Japan’s semi-permanent Western population, and those of the “low-skilled” world of immigrants from Asia.

But that would be wrong. Apart from entry requirements and visa stipulations, Japanese law treats all foreigners basically the same. And while perceptions of foreigners is different based on skin color and culture, the rights of foreigners and the level of their acceptance in Japan will depend on the experiences of other populations. There are already many examples of this connection. The question of whether zainichi Koreans will be accepted as a distinct “Japanese-Korean” identity or whether they will end up mostly assimilated and forgotten will decide how future populations will be dealt with. And if human rights activist Arudo Debito is successful in his campaign to get a national law passed banning racial discrimination, that legal framework will be enforceable for the entire foreign population.

At the same time, the bad deeds of a small group of people can ruin things for everyone else, fairly or not. Crimes committed by foreign nationals are often highly publicized thanks to a xenophobic police force that I suspect is in search of a scapegoat to help market security equipment and grab bigger budgets. Whatever the case, the anti-foreign crime campaign has resulted in bothersome ID checks and humiliating signs warning citizens to watch out for suspicious foreigners. And as limited as its impact was (thanks mainly to successful protests that cut its shelf life to mere months), the “Foreign Crime File” book, a despicable, short-lived multimedia diatribe against the foreign population in Japan, did not distinguish between Asians, Africans, or Westerners in its cheap attempts to cast foreigners in a negative light.

My biggest worry is that without proactive efforts to make this immigration smooth and easy, Japan will start to experience something like the US illegal immigration problem, with all the poverty, crime, and mistrust that goes with it. Occasional statements from high-level politicians, like Education Minister Bunmei Ibuki’s statement that Japan is a “homogeneous nation,” should remind people that race consciousness and nativism are not dead and work as appeals to a conservative voter base. The time to lay the groundwork is now to prevent a backlash against foreigners that would prove a major headache for the entire foreign population, and a loss of the culture of tranquil co-existence with neighbors that has defined Japanese society.

Adamu in Japan – blogging to be spotty, directionless

I’ve finally arrived in Japan to live after spending almost 4 years away, save for some brief visits. My blogging up to now has been a way for me to keep up on Japanese current events from the outside. But now that I’m here and have easy access to TV, ads, products, marketing campaigns, convenience stores, books, etc, I’m going to have to make it about something else. I’m still kind of thinking about that.

But first, some good things about coming to Japan:

  • Cleanliness: I swear, I would be more comfortable sleeping on the Tokyo sidewalks than on the floor of my college dorm room. That’s how clean this place is. Perhaps I’m just surprised at the relative difference with unabashedly filthy and smelly Thailand (a trait which, btw, takes nothing away from its charm).
  • Awesome food: Thai food is amazing, and I miss it to death (and all the real American food that’s available in Bangkok) dearly. Still, Japanese food is fresh, delicious, and healthy. I haven’t felt this clear-headed and energized in months.
  • Speaking the language: My spoken Japanese is very rusty (and was never all that great to begin with), but it is still good enough to do whatever I need to in life, unlike Thailand where I had to wildly gesticulate and scream a mix of English and the few Thai phrases I knew to get anything done at all. That’s another major source of stress lifted.
  • Fast Internet: In Thailand I was suffering with a crappy DSL connection that was slow, required quirky proprietary software. On top of that, the authorities banned YouTube out of the blue 2 weeks ago because of a video defaming the king. The connection I’m using now is a smoooooth hikari fiber line that lets me get the new Sopranos in less than 2 hours.
  • Japanese bookstores: I love Japan’s weekly magazines and manga, and Japan is, obviously, Japanese literature heaven. When I get some time I need to head over to my local library.
  • Lame things about being in Japan:

  • Bad TV: Even though I couldn’t understand it, I knew I hated Thai TV, in particular the comedy shows, that constantly feature slide-whistle punchlines, wah-wah-wah sappy jokes, and Munsters-style fast forward action. Ick. Japan’s TV shows have a bit fewer of the vaudeville trappings, but watching crap like Kazuko Hosoki still leaves me feeling like my IQ is being sucked into the TV. The TV news analysis shows are usually really lame too.
  • Expensive! I need to move closer to Tokyo fast because now just going there costs about 2000 yen. Going out to lunch is easily 3000. How does anyone manage to save money?
  • Cold! It’s been like winter since I came here, which has jarred me after coming from Thailand. It’s going from one extreme to the other: In Thailand I had only spotty A/C in the middle of intense, constant heat, and here there is no central heating when it’s cold.
  • Japanese culture: For some reason I feel forced into things a lot of the time. I realize I can’t come to this country and act exactly as I did in Thailand or Japan, but this isn’t North Korea and I’m not Private Jenkins.
  • All in all, I’m excited to be here and start my married life (filed the papers on Monday) and get back in the game with my career after almost a year of translating at home in a situation my wife calls “house arrest.” I’m not sure what I’ll be blogging about from now on, but expect more translations and my occasional thoughts and pictures.

    Contemporary Art Tokyo to feature Thai Artists (and Adamu, sort of)

    Translated from the museum’s official site (edited as needed):

    The First Exhibit to Offer an Expansive Look at Thailand’s Modern Art History

    mitemithai-644_1_3.JPGFrom April 18-May 20, the Museum of Contemporary Art Tokyo will hold Show Me Thai, an exhibit jointly produced by the Kingdom of Thailand’s Office of Contemporary Arts and Culture, to commemorate the 120th anniversary of Thai-Japanese friendship.

    This is the first attempt to take an expansive look at Thailand’s contemporary art history. The exhibit will take visitors from the country’s early contacts with Japanese culture, which started before World War II and progressed through Japan’s era of high economic growth (1955-1975), to the time of high GDP growth in Thailand (1986-1996), when the Buddhist kingdom absorbed massive amounts of Japanese pop culture, including manga, music, and fashion, all the way to the present day.

    A diverse array of pieces, including paintings, sculptures, mixed media, video, installations, cinema, animation, and music will be displayed throughout the museums’s exhibition space. And that’s not all – the artists themselves will be there to participate in performances and panel discussions.

    Among the 60 artists and groups participating (Links lead to samples, mostly, or at least a picture of the artist):

    Pinaree Sanpitak (painter)
    Rirkrit Tiravanija (installations/mixed media)
    Nobuyoshi Araki (photographer)
    Sutee Kunavichayanont
    Navin Rawanchikul (mixed media, lives in Fukuoka)
    Wisut Ponnimit
    Yasumasa Morimura
    Ichi Ikeda
    Apichatpong Weerasethakul (filmmaker whose filmography includes “Blissfully Yours,” a romance that was showcased in a non-competing section of the 2002 Cannes Film Festival, as well as the more interestingly titled “The Adventure of Iron Pussy”)
    Yoshitomo Nara (pop artist who has done Shonen Knife album art and is the subject of a recent documentary)

    The museum is open from 10AM-6PM, and will be closed on all Mondays save for April 30. The museum is easily accessible by Tokyo Metro, Kiyosumi-Shirakawa (清澄白河) Station on the Hanzaemon and Oedo Lines.

    Disclaimer/self-promotion – I learned of this event because a translation I did about Thai-Japanese contemporary art exchange will be featured in the exhibit’s ‘art catalogue,’ with full ‘translator’ credit! This doesn’t exactly mean a whole lot, but I’m pretty excited to go see this, not least because this is my first time being published but also because I just might get to take in more Thai culture in Tokyo than I did when I lived in Bangkok.

    Brief update

    I’ve quit my deadly-dull office job in the Kyoto area and will be heading back to the US on May 27 where I will either just do freelance translation work at home or find some sort of job in Manhattan, while I try and find a graduate school that will take me.

    On Wednesday (April 11) I will be heading over to Tokyo for a week and a bit, so if anyone reading this has any absolutely must-see places in Tokyo, or wants to meet up, please let me know.

    Notice to gaijin: The new smart way to get to the city from Narita

    By which I’m referring to the new Suica/Narita Express deal. For 3,500 yen, you get a Suica card which provides (1) a one-way trip to anywhere in Tokyo via Narita Express and (2) 2,000 yen in Suica credit which you can spend on just about anything.

    Considering that the Narita Express alone usually costs 3,000 yen just to get you to Tokyo Station, this is an incredible deal. The only catch is that you need a foreign passport to get it. (Discrimination!)

    Living on the cheap in Tokyo

    How to live cheaply in one of the world’s most expensive cities? Well, it really isn’t that expensive unless you want it to be, and I will submit that living a broke life in Tokyo is MUCH better than living a broke life anywhere in America.

    Here are some ideas:

    Lodging

    This is the big kahuna that makes life in Tokyo expensive. If you want a swank apartment in the middle of the city, it might set you back ¥400,000 a month. Fortunately, there are cheaper ways to do things.

    • Best way: seduce someone of your preferred gender who has a nice apartment. If they’re female, they’ll even make you breakfast in the morning! (And if they don’t, find one who will; Japan is a buyer’s market.)
    • Stay with a host family. You get conversation, you probably get meals, and you might even get your laundry done. On the other hand, host families have their drawbacks; you can’t go out partying late at night, and they might turn out to be batshit crazy. (I never had the former problem in high school; I definitely had the latter problem.)
    • Get a place in the middle of nowhere, like a ¥40,000 room in Nishi-nippori located a cool 20-minute bus ride from the Yamanote Line.
    • If you insist on living in the middle of the city, you can ditch your bathroom and live in a 6-mat room 5 minutes away from Shibuya for the same price. Granted, you have to go to a sento to clean yourself up, and your toilet is shared… but still!
    • By the way, Yahoo! Japan Real Estate is an excellent resource for scouting out really cheap places to stay, assuming you know enough Japanese to navigate around. If English is your only language (or if you aren’t staying for a year or so), you might be relegated to the hell that is Sakura House.

    Food

    • There are always noodle products, of course, and those sketchy pasta sauces they sell in foil pouches at Don Quijote. Yum!
    • If you want slightly better food, you can live on a diet of convenience store bentos, gyudon and curry for under ¥2,000 a day. Pretty easy, if not all that healthy.
    • If you’re into eating out, my advice would be to get used to having big lunches. Many of the smaller restaurants around the business districts of Tokyo will sell you a massive lunch prepared with good ingredients for ¥1,000 or less. Then you can make your other calories for the day more or less blank.
    • One of the best money-savers out there—as much as it might pain some of you to consider it—is to avoid booze. “What you say! No drinking in Japan? Heresy!” But it’s true: consider that a beer or chuhai will cost you ¥300 even at a cheap place.

    Transportation

    This one is easy. Ditch the subway and get yourself a bicycle. You might still want to hop on the Metro when it’s raining, but biking around is a great way to see the city, burn some calories and save some money. (I was spending ¥5,000 a month on Metro cards before I got my bike; at ¥10,000 it paid for itself after two nice winter/spring months, although it got pretty unbearable during the summer. If you have a cheap sento near your workplace, go for it! If you work at a sento, double points!) But if you want a convenient yet still an affordable way to reach your destination, it might be worthwhile to research options like a limousine service.

    Adam “Swamp Donkey” Richards, up-and-coming heavyweight

    ‘Swamp Donkey’ Richards’ boxing career rising with help from Holyfield
    By DAVID BOCLAIR

    swamp-donkey.jpgBoxing has had a pair of Sugar Rays, an Iron Mike and a Raging Bull, among others.

    Now there’s Swamp Donkey. That’s right — Swamp Donkey.

    No, Adam Richards is not from Louisiana or Florida or anyplace else generally associated with swamps. The 26-year-old Riverdale High School graduate and former MTSU student does pack a mule-like wallop, though, which makes him an attraction in the world of professional boxing. An original nickname, even if it is a bit unusual, does not hurt either.

    “More people (in boxing circles) know me by ‘Swamp’ or ‘Swamp Donkey’ than my own name,” he said. “It’s really taken off. It’s catchy. If you look up on the Internet, I get a little grief. There’s a lot of people who make fun of it and a lot of people who like it. You’re going to have either way.”

    For the better part of the last three years, though, Richards’ career has been headed in one direction — up.

    Earlier this month he moved into the top 100 heavyweights in the world, according to at least one ranking source. For the past two years he has worked with one of the sport’s leading trainers, Ronnie Shields, in the same Houston camp as former world champion Evander Holyfield.

    What this article doesn’t tell you is that he took the name “Swamp Donkey” because his boxing buddies kept getting him confused with a certain blogger…

    (I’ve noted Swamp before)

    Online advertising in Japan, status report

    For some reason ads have popped up into Japan’s news agenda lately (Second Life is coming to Japan, local newspapers got in trouble in their flailing attempts to use government contracts to make up for lost ad revenue) and on the Western side as well (Google is offering a new pricing structure for its ads). So as an armchair observer I want to bring up (and translate) some interesting articles I’ve seen on the subject that take a closer look.

    Last month, Dentsu announced that Internet ad spending surged in 2006. It beat out radio spending in 2004 and is poised to overtake spending on magazine ads in 2007. The numbers came out with great fanfare, but not much context. Thankfully, Shukan Toyo Keizai has stepped up to fill in the details with a free online article on the subject (translated in full below):

    At the Front Lines in the “Hard Fight” of Internet Advertising
    March 16, 2007

    In 2006, Japan’s Internet ad spending jumped 30% from the year before to 363 billion yen. Yet, we don’t hear Internet companies heralding that “Internet ads are booming.” What’s going on in the field?

    “Companies have been leaving ad budgets unspent these past 4 quarters. They have money leftover but aren’t using it. We’ve been hoping that they’ll finally use it each quarter, but that time has yet to come” (Masahiro Inoue, President of Yahoo! Japan). “The Internet ad market overall is stagnating, with industry-wide price-drops in advertising having an effect on regular ads including banner, text, and search-sensitive ads” (Tetsuya Ebata, President of AllAbout Japan).

    net-ads-140_2.jpgIn Februray, Dentsu announced in its “Advertising Spending in Japan, 2006” (PDF in Japanese)that as ad spending for the 4 mass media of TV, newspapers, magazines, and radio slumped, Internet ads jump 30% on a year-on-year basis to 363 billion yen. Net ads already surpassed radio in 2004, and it seems certain that they will beat out magazines in 2007.

    Despite this, most top executives at Internet companies complained of a “sense of stagnation in Internet ads” in earnings announcements for the Oct-Dec 2006 quarter.

    Internet businesses get their main source of revenue from advertising. Slow growth in that market could lead to slower growth for Internet companies as well.

    Some Smaller Companies Reporting Negative Growth

    So what’s going on here? Take Yahoo! Japan, for example. It ad revenue grew 40% in 2006 to 84.7 billion yen. Looking at this figure alone makes things look like an ideal situation. But one’s impression changes drastically when looking at per-quarter numbers. Though Yahoo’s ad revenue grew 13% from 18 billion yen in Oct-Dec 2005 to 20.5 billion yen in the same quarter in 2006, growth clearly slowed in the following quarters: 21.2 billion, 21.2 billion, 21.7 billion.

    Examples of negative growth are far from rare. Excite Japan, a mid-market portal site, has continued to see its ad revenue shrink since the Apr-Jun 2006 quarter. AllAbout, a company offering specialized guides and articles from experts in their respective fields, has been unable to exceed its peak in the Oct-Dec 2005 quarter. Ad revenue for Cyber Agent’s media operations saw their growth come to a halt in 2006.

    The cause of this slowdown in Net ads, as everyone in the industry points out, is the drop in ad placements from major consumer credit firms. These companies were a major advertiser in all Internet media from banner ads to search-sensitive ads. But they took a turn for the worse business-wise when scandals led to a rise in maximum interest rates. The companies’ major scaling back of ad budgets has taken its toll.

    “The exodus of consumer finance has collapsed ad demand” (Osamu Ishikawa, Finance and Accounting Director, Excite Japan); “Revenues from consumer finance companies have been dropping each quarter since the first. Revenues from many other industries are growing, but they have not made up for the drop” (Akira Kashigawa, CFO at Yahoo! Japan)

    Over the past few years, year-on-year growth rates of 50 or 60 percent were taken for granted, and quite a few companies had boosted hiring and investment based on this surge, moves that are at the root of the doom and gloom attitudes that have prevailed from mid-2006.

    But if you think that the industry will return to its former health after riding out the shock of consumer finance, think again. That’s because a huge structural change is underway in the Internet ad market.

    A Growing Oligopoly: A Battle for the Top Spot between the 2 Big Search Engines

    Recently, you have probably noticed quite a few TV, newspaper, and outdoor ads that feature search boxes.

    Cross-media marketing, a practice that combines existing advertising techniques and search engines, is experiencing a surge in popularity. “Dentsu and Hakuhodo, who want to sell existing ad space (which is more profitable than Internet ads), are pitching this method as a way to meet the needs of companies that want to take advantage of the Internet,” explains a source connected to the industry. Companies both large and small have been getting into the cross-media game.

    Search-sensitive ads refer to ads that are displayed above or to the right of results when a user searches on Yahoo! or Google. They are very effective since the ads displayed are tailored to the users’ interests and ad fees are only paid when the ads are actually clicked on, giving them a high level of cost effectiveness. Users and advertisers have both accepted the ads and they have exploded recently.

    The above-mentioned Dentsu survey shows that search-sensitive ads grew 57% in 2006 to 93 billion yen, making up 25% of all net ads. However, asd President Akira Shinta of Aun Consulting notes, “30% of the American market is search-sensitive ads. Their share is going to grow in Japan as well.”

    Japan’s net ad market is currently dominated by one player, Yahoo! Japan, which has 25% of the market. But the more search-sensitive ads grow, the more Google is sure to make its presence felt.

    Unlike in the US, where Google reigns supreme in search engine market share, Yahoo has held onto the top spot in Japan. Even still, Shinta argues that “Google is gradually becoming a threat.” While Yahoo Japan relies on Yahoo! USA subsidiary Overture for its search ad system, Google has its own. If search-sensitive ad revenue were set at 100, Yahoo’s takehome would be 55, while Google takes home 85-100. Moreover, Google, which has teamed up with KDDI, is in a better position in the mobile search market than Yahoo is in its partnership with Softbank.

    What’s happening right now is a fight for the top spot in the Japanese market between Yahoo and Google. It’s gone from a market dominated by a single company to one dominated by 2 companies, and as a result an oligopoly has taken shape. Unless they can sell their uniqueness, the “3rd place and under” Internet companies may get weeded out as they suffer a structural lull.

    (by Masao Yamada)

    UPDATE: Excite Japan’s Web Ad Times has a good graph depicting the slowdown. You shouldn’t even need to read Japanese to see that growth is way down.

    Welcome back part 2

    OK, after the false re-start a couple of days ago I have finally re-wiped everything and reinstalled from scratch, and finally figured out the correct way to import the old database with ALL Asian language text intact. We had some good discussion going on the “welcome back” thread over the past few days, so as I promised I’ll just post the archive of that below, so everyone can re-read their own comments for fun long into the future.

    Continue reading Welcome back part 2