MySpace plans Japanese network
MySpace.com will launch a Japanese version of the fast-growing social networking site today, in a 50-50 joint venture with SoftBank, the telecoms and Internet group.
MySpace Japan will go head to head with Mixi, the leading Japanese equivalent, whose membership has risen fivefold in the past year to six million.
The deal comes after talks in Tokyo this week between Rupert Murdoch, the chairman and chief executive of News Corporation, and Masayoshi Son, the colourful Internet entrepreneur and head of SoftBank.
News Corp, parent company of The Times, bought MySpace for $580 million last year. The tie-up will allow Japanese users to access MySpace in their own language for the first time and to post photographs, video and weblogs on the site.
MySpace Japan initially will be geared towards personal computers, with mobile phone compatibility planned for the future.
Any mobile deal would not, however, be exclusive to SoftBank phones and MySpace could still seek tie-ups with DoCoMo and KDDI, SoftBank’s mobile rivals.
MySpace’s content could prove to be a critical retention tool for SoftBank’s mobile service as it seeks to narrow the gap with its rivals. Mr Son bought Vodafone’s Japanese arm for $15 billion (£8 billion) in April, after the British mobile phone giant failed to make a success of the business. It is understood that MySpace and SoftBank each will provide half of the one billion yen (£4.5 million) investment to form MySpace Japan, which will operate the site.
Sources close to MySpace said last night that Mr Son had first approached the company about a tie-up in April.
SoftBank, which owns 41.9 per cent of Yahoo! Japan, is understood to believe that a partnership with News Corp will help to extend its business in the fast-growing area of social networking. MySpace believes that a tie-up with a Japanese partner is critical to the success of the deal.
“We like the idea, when we come to countries in Asia, of joint ventures,” Mr Murdoch said last night in a speech ahead of the announcement.
Mr Murdoch and Mr Son have collaborated on other deals, including on SKY Perfect, the Japanese satellite broadcaster and internet service provider.
However, Mr Murdoch emphasised last night that any deal with Mr Son would not be exclusive. “We are friends. We will do things together here [in Japan] and in other parts of the world. But not to the exclusion of other things.”
It is understood that MySpace is considering a move into other parts of Asia, particularly China and South Korea, where it will face fierce competition from Cyworld.
“We see [MySpace] getting bigger and bigger as it spreads around the world. Here and in other Asian countries we are open to partnerships,” Mr Murdoch said.
The new venture comes amid rapid growth in Japan’s social networking sites, which are thought to have more than ten million users. The entrance of MySpace is expected to intensify competition in the market. MySpace believes that it will have the edge over Mixi by giving users a chance to make friendships with people around the world.
MySpace has more than 100 million registered members globally. It has expanded into Britain, France, Germany, Ireland and Australia.
Shares of Mixi fell 5 per cent to Y2.14 million because of investor concerns that MySpace could take away some of its subscribers. SoftBank’s shares fell 1.2 per cent to Y2,410, while the benchmark Nikkei index rose 0.1 per cent.
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