Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

IRG Technology, Media and Telecommunications Weekly Market Review (Week of 13 – 19 June 2011)

         Twitter has entered a venture with Yahoo Japan that will see Tweets featured on various Yahoo services. The venture will start with having Tweets placed alongside real-time Yahoo Japan results pages. According to Twitter, the venture will allow Twitter to extend its reach in Japan, where it already enjoys a large following. Japanese citizens had particularly utilized Twitter in the direct aftermath of the country’s devastating earthquake in March. Twitter had last month entered a deal with incumbent operator NTT Docomo, to develop features and applications incorporating Twitter into the NTT Docomo handsets.
         Sharp Corp. will release in Japan next month a range of Internet-ready television sets that can interact with its smartphones, as the Japanese electronics maker tries to spur new demand and gain a competitive edge in an increasingly tough market. Sharp, which holds the largest share of the Japanese TV market, enjoyed a temporary boost in sales during the last fiscal year thanks to a government subsidy program for power-efficient consumer electronics. But with demand seen to decline sharply this fiscal year after the expiry of the program and amid weak consumer sentiment, the key is to create new value, said Tsuneo Nakamura, executive officer and general manager of Sharp's audio visual systems business, at a press conference. The new Aquos L Series TVs, to be released in Japan on July 15, will allow viewers to access the Internet via a new online platform called Aquos City--offering news, entertainment and weather forecasts, among other content and services. The company said it hasn't decided whether to release similar products outside of Japan.
         Japan's parliament enacted legislation criminalizing the creation or distribution of computer viruses to crack down on the problem of cybercrimes. However, the critics say the move could infringe on the constitutionally guaranteed privacy of communications. The legislation makes the creation or distribution of a computer virus without a reasonable cause punishable by up to three years in prison or 500,000 yen (US$6,248) in fines, and the acquisition or storage of one punishable by up to two years in prison or 300,000 yen (US$3,749) in fines. It also makes it punishable to send e-mail messages containing pornographic images to a random number of people.
         Jupiter Telecommunications ended May with a total of 3.5 million households subscribers, up 5.1 percent year-on-year. Combined revenue generating units (RGUs) for cable television, high-speed Internet access and telephony services reached approximately 6.56 million, up 7.9 percent from May last year. The bundle ratio (average number of services received per subscribing household) increased to 1.88 from 1.83 a year earlier. The number of internet subscribers went up 7.1 percent to 1.75 million from 1.63 million a year earlier, as the number of telephony customers grew 12.1 percent to 2.06 million from 1.84 million. J:Com also had 2.75 million cable TV customers, up 5.5 percent from 2.61 million in May 2010.
         Fujitsu forecast a small increase in its full-year results. The company did not release an annual forecast at its last earnings announcement, due to uncertainty about the impact of the earthquake in Japan. Fujitsu said there is still some uncertainty about domestic ICT demand, but the risk associated with procurement of raw materials and components has abated. For the year to March 2012, the company forecast revenues of 4.60 trillion yen (US$57 billion), and operating profit of 135 billion yen (US$1.6 billion). Net profit is expected to increase to 28.99 billion yen (US$362 million). Revenues for the first six months of the year are forecast slightly lower year-on-year, with a steep fall in operating profit and breakeven net result. Fujitsu expects PC shipments over the full year to rise to 6.60 million, from 5.42 million last year, while ICT services revenues will be flat to slightly higher.
         South Korean regulators are planning a major drive towards NFC adoption, including requiring smartphone vendors to include the capability in their phones. KCC will oversee efforts to install or upgrade 300,000 mobile payment checkout point of sale systems this year, Reuters reports. Mobile operators and credit card companies will deploy the terminals at shops including retail stores, fast food outlets and petrol stations. Credit card companies will offer discounts when paying by phone in a bid to stimulate adoption. All smartphones that go on sale in South Korea will also soon need to be equipped with an NFC chip. The news follows last week's announcement by the KCC that operators SK Telecom, KT and LG U+, as well as card issuers, government bodies and consumer electronics firms, will join forces for the Grand NFC Korea Alliance. The Alliance will facilitate NFC adoption, with the goal of having the industry generate nearly US$1 billion in revenue and create 5,700 jobs over the next five years, NFC World cited. SK Telecom also agreed to team up with KDDI and Softbank to trial NFC payments for travelers between Korea and Japan.
         LG Electronics is targeting 25 percent growth in annual mobile phone sales in Japan this year. LG, which shipped 1.6 million units of mobile phones in the Japan last year, set its target for this year at 2 million as a new smartphone model is scheduled to launch soon.
         A Google Inc. joint venture in China applied for a regulatory license to operate an online mapping service in the country. The application comes as Google, which offers the map website Google Maps, faces local disruptions to its services, a declining search market share in China and tense relations with the Chinese government. Google's main rival in China, online search provider Baidu Inc., has gained more of the search market as Google has slid. China's State Bureau of Surveying and Mapping issued rules last year requiring all companies providing online map and location services, searches or downloads in China to apply for approval to continue operating.
         Sina has signed a strategic venture with China Unicom, under which the two companies will deepen cooperation over development of products based around Sina's Twitter-like microblogging service, among other fields. The mobile carrier will provide voice communication and 3G mobile internet services to Sina, as both will develop e-commerce, search, location-based services and microblogging-based products. Sina had announced a venture between its microblogging service and China Telecom, allowing users to log in with their China Telecom service accounts.
         Alibaba has decided to split Taobao into three firms, called,, and, effective from June 17. The company is splitting the country's largest online shopping website into three separate firms that focus on different segments of the market as it seeks to adjust to rapid growth and rising competition. will be a consumer-to-consumer website, and will be business-to-consumer website. The company had 70 percent of the country's online sales transacted in the first quarter of this year and Goldman Sachs recently valued it at about US$7 billion.
         Tencent will establish a wireless internet technology R&D center in Wuhan, capital of Hubei Province, with an initial investment of no less than 1 billion yuan (US$154 million). The company's president, Liu Zhiping, had stated that it intends to double its investment in development of internet services to 10 billion yuan (US$1.5 billion).
         Tudou will raise up to US$120 million through a Nasdaq initial public offering after company founder, chairman and CEO Gary Wang and his ex-wife settled a lawsuit contesting equity interest in site's operating and revenue-generating variable interest entity Quan Toodou Network Science and Technology. Gary Wang's ex-wife was seeking division of 76 percent of Wang's interest in Quan Toodou, though the court ruled in June this year that Wang is entitled to the equity interests in any companies that are directly or indirectly held by him, leaving him in control of 95 percent of the VIE.
         Tencent Holdings Ltd. will boost the size of a company investment fund targeting third-party software developers to 10 billion yuan (US$1.5 billion), as the company looks to add more applications to its online services, Tencent Chairman Pony Ma said. Tencent in January said it would release a 5 billion yuan (US$772 million) investment fund to invest in online game companies and other firms. Tencent has said it would open up some of its online platforms for external software developers to contribute applications, a move that could bring the company new revenue flows. Of Tencent's nearly 20 billion yuan (US$3.09 billion) in revenue last year, it gave 4 billion yuan (US$618 million) to business partners, illustrating Tencent is moving toward an open platform and is willing to work with external software developers.
         Moca World has completed second-round financing worth around US$10 million, cited. The investment will be directed towards smartphone games development and expansion into the Japanese market.  The company received first-round funding of US$2 million from Japanese venture capital firm Infinity Venture Partners in 2010.
         Telefonica SA has raised its stake in China Unicom (Hong Kong) Ltd. to 9.01 percent from 8.99 percent. Spain's No. 1 telecommunications firm by market value acquired 3.84 million China Unicom shares at an average price of HK$15.95 each (US$2.04).
         China Mobile, China Unicom, and China Telecom have invested a cumulative total of 289 billion yuan (US$44.66 billion) in rolling out 3G services. The number of 3G base stations in the country totals 697,000. The three companies had a combined total of 67.57 million 3G subscribers at the end of April.
Media, Entertainment and Gaming
·          NetDragon Websoft had net income for the first quarter of 2011 of 34.61 million yuan (US$5.3 million). Total revenues for the first quarter were 150.7 million yuan (US$23.2 million), up 4.7 percent quarter- on- quarter, with the company's mobile Internet business generating 6.1 million yuan (US$942 million), representing an increase of 45.8 percent from the prior quarter. During the first three months of this year, NetDragon notched up average concurrent users of its online games of 246,000, up 6.0 percent quarter- on- quarter, as its peak concurrent users hit 546,000, up 0.7 percent over the fourth quarter of 2010. The company expects to release expansion packs for its games Conquer Online and Zero Online, and to start open beta testing of its first 3D MMORPG, World of Dungeon Keeper, its first 2D beat-em-up side scroller, icombo, and its first first-person shooter game, Absolute Force in the second half of 2011.
·          China's Ministry of Finance issued temporary rules canceling import duty for products needed for comics and animation production. The MOF, together with the General Administration of Customs, the State Administration of Taxation, and the Ministry of Culture, have worked out the interim rules by which animation companies can be exempted from import tariffs and value-added taxes when importing products used for comic and animation development and production. The implementation duration of the temporary rules runs from January 1, 2011 to December 31, 2015. The rules state that qualified animation companies must have registered capital of at least 800,000 yuan (US$123,418).