[Interview] Yahoo! Japan CEO talks partnership opportunities for French startups and more

Yahoo! Japan has had a very different trajectory than that of its joint venture partner Yahoo. Having heralded in its 16th year of record high sales and profits and continuing to be the #1 visited site in Japan (#15 in the world), Yahoo! Japan is a force to be reckoned with. From search to advertising to news to shopping and auctions to, even, FX trading, Yahoo! Japan continues to expand their footprint in internet users’ lives. In France, Yahoo! Japan is most known for their fruitful partnership with French ad-tech star Criteo. Their exclusive ad deal with Criteo and participation in Criteo’s €30 million round last year (which Yahoo! Japan CEO Manabu Miyasaka playfully teased our own Rude VC for missing out on), has been a big win for both companies and clearly a great model for Yahoo! Japan to follow as they look for other partnership opportunities in France and across Europe.

I was fortunate to have had the opportunity to sit down yesterday with their CEO Manabu Miyasaka who, incidentally, is in Paris for a conference at Criteo (a few of his key colleagues from Japan joined as well). We spoke in detail about their priority business areas as well as their continuing desire to explore opportunities for collaboration with French and other European startups.

Which  areas are you looking to most for opportunities?

As you know Yahoo! Japan has various areas in which we compete. We, of course, organize these areas by priority, however, we still have a portfolio of businesses that we need to manage and determine how to grow. We currently have a smartphone first policy given the rapid growth and potential of smartphones in Japan, so are working to prioritize and look for opportunities in this growing area.

What do you see as interesting areas of collaboration with French startups?

Although we do have constraints around what we can do outside Japan given the structure of our joint-venture relationship with Yahoo Inc, we are definitely looking for opportunities. We are partnering with and also invested in Criteo (so can certainly do these types of deals). We’re particularly interested in HTML 5 games, both startup and established HTML5 game producers/developers. We currently have partnerships with (Japanese game giants) GREE and DeNA and now have 10 million users playing games on our site, but we want this to grow. Many of these games are flash games, but we strongly believe in the potential of HTML5. Although the success of Puzzles and Dragons has, perhaps, moved the interest in the Japanese market back to native apps, to me this situation is temporary and HTML5 will be an important force in the long run. Another area I find very interesting is connected objects, for which there is a lot of interest in the Japanese market.

Your advertising revenues have been growing leaps and bounds (+15% in 2012). What about your ecommerce businesses? What are the areas of opportunity there?

It’s important to, first of all, point out that this is a very domestic-oriented business. As in France, the ecommerce sector is growing very rapidly but still offers significant opportunity. For example, the total consumer commerce market in Japan is projected to be $1.4 trillion and only a small share (estimated 10%) of those sales are generated online.  So, there’s a lot of room for growth. One thing we are learning is that in order to lead in this business, you eventually have to manage the logistical side of things which is something we’re working on. We’re looking for opportunities to sell the best items we can on our shopping and auction (called YAFUOKU!) sites. We also have a buying team that seeks out products from around the world. As mentioned, I’m also very interested in innovative products in the area of connected objects, for example. I want to be the first to carry items such as the ones we discussed earlier on YAFUOKU! (i.e. devices from French connect objects leader Withings).

What are the main opportunities and advantages that Yahoo! Japan can offer French and other European businesses?

There are three main things that Yahoo! Japan can offer French businesses in terms of opportunities. First, traffic. Japan is a huge, self-sustaining market and we currently are the leader in most of the categories we’re in. Second, ad sales. We have a leading, high performing our display ad-distribution network (YDN) and premium advertising opportunities. Lastly, lobbying. One of the biggest challenges entering Japan is understanding and adapting to the laws, policies, and regulations, which are quite different (from what you see elsewhere). As one of the largest companies in Japan, we can help with this. Japan is a different market (culturally, politically, etc), so it is extremely important to enter the market with a strategic partner.