Google Makes Headway Into Japan Cell Phone Search Market (GOOG)

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Includes: DCM, GOOG, SFTBF
by: Steven Towns

Google Inc (NASDAQ:GOOG) is finally about to make some real noise in Japan and it is doing so in the cellular phone search market via a deal with the number 2 services provider KDDI Corp (Tokyo: 9433).

Growth in the cellular phone business in Japan is a challenge with over 90 million subscribers among a stagnant population of about 120 million. Aside from trying to come up with the most appealing of handsets, competition is most heated in services.

au by KDDI currently has the advantage in music distribution while back in the day Vodafone Japan (originally JPhone and now to become Softbank Mobile Corp) had the first camera phone. NTT DoCoMo (NYSE:DCM) has been a leader with its comprehensive i-mode services including the "mobile wallet."

According to Reuters coverage of the Google, KDDI deal a company spokesman from KDDI said the firm expects limited direct impact on earnings and that KDDI's "main target from this move is to improve usefulness of services to our existing users."

The above statement is pretty uninspiring to me and instead I would be focusing on not only satisfying current users but also looking to grab market share.

Google will place text advertisements within search results. With KDDI controlling about 28% of the cellular services market Google will definitely have a chance to get its name out and build its reputation but it remains to be seen if it will be embraced and how big a revenue stream there will be.

Other Google Japan references:

Google Japan Blog (in Japanese)

Blog post from the Search Engine Journal, "Hanging Out With Google Japan."