Technorati in the US relaunched today, introducing a set of new features and a fresh overall look, and received a 2 million USD cash injection yesterday, but a few hours ago Technorati Japan has announced [JP] it will cease to exist as early as October 23. The move itself isn’t too surprising to many people in Japan’s web industry, but the speed with which Technorati Japan jumps into the deadpool is (that’s Thursday next week).
Technorati Japan is operated by Tokyo-based Digital Garage, a JASDAQ-listed company that also takes care of Twitter’s Japanese operations. But unlike Twitter, Technorati Japan is a separate entity that’s 70% owned by Digital Garage (there’s no “Twitter Japan” as such by the way).
And Digital Garage is in trouble: In fiscal 2009, net sales fell 13% year-on-year. Income only took a turn from red to black because of substantial Kakaku.com stock sales in May this year (180 million USD). Compared to 2008, the value of company assets were reduced by a whopping 25%. But there’s also a relation to Technorati in the US: In August last year, Digital Garage issued new shares to Technorati Inc., leading to a 30% ownership by the Americans (which cost them 700,000 USD).
Interesting factoid: Digital Garage itself mentions the word “Twitter” 21 times in its latest financial report (ENG, from August), while the word “Technorati” appears just two times. So even though they wrote they’ll try to move Technorati Japan “into different business areas in support of Twitter-focused efforts” (page 15), my guess is they knew what would come and they can now focus on making money with Twitter (no pun intended).
At least the closure of Technorati Japan probably makes another company happy: Technorati’s main competitor Kizasi, a Japan-only blog search engine and aggregation service (review), shouldn’t be too sad about the news.
Serkan Toto
Regarding some of korean Web service providers, they also had same financial difficulties due to severe competition at the same industry. Some closed, and the other is merged or acquired by major top players.
Recently, Major portals (of course the #1 in Korea is Naver.com) are still in struggle to enlarge their power all over the web service section with thier own.
The most important revenue is from the advertisement, so they try to increase user view or page view.
In case of SK communications, which operates #1 SNS service ‘Cyworld.com’ and #3 Portal ‘Nate.com(nate.com+empas.com)’ ,started to merge the main page of two different services.
In case of closed SNS service Cyworld.com, selling the decoration items and musics doesn’t make enough money as much as at the boom-up stage.
And their ambicious Portal ,which merged Lycos and Empas for being more massive and attractive web portal, also was in hardtime with definite gap between #2 and #3 portal. Even though they bought kind of powerful searching engine, it haven’t worked at all.
About a month before, two web services’ main page were joint togather in one NATE.COM page. This was very effective to raise up PV and UV in short time.
It still remains a problem whether this will create enough advertisement income or not, however it may work as a turn around if they keep this trend and adding new services co-working with SK Telcom’s App. Store.
This arbitration will be continued for a whire in matured web service industry.