NTT, Inktomi to Develop Japanese Search Engine

Nippon telegraph and telephone corp. (NTT), NTT Advertising, and California-based Inktomi, which offers the HotBot engine in the US, have announced their tie-up for development of a commercial Japanese-language Internet search engine and construction of World Wide Web databases for more efficient searches of Japanese homepages.

For this project, NTT and Inktomi will combine Inktomi's database resources with the Japanese InfoBee search engine developed by NTT's Human Interface Laboratories. The engine to be developed will be linked to HotBot in the US and Anzwers in Australia to construct a global search engine infrastructure.

NTT Advertising will be in charge of commercializing the Japanese search engine. Embedding of the Inktomi engine into the Japanese-language processing portion of InfoBee will be entrusted to NTT Intelligent Technology.

The Inktomi search engine reportedly has the world's largest WWW homepage database, covering some 54 million full-text pages. NTT's InfoBee features the methodological analysis of Japanese-language text, which enables quicker searches of even long Japanese text data.

ECOM Releases Online Shopping Survey Results

Japanese consumers are looking to electronic commerce as a means for easily purchasing show and event tickets, books, and imported goods. They also expect it to be useful in obtaining business-related data and copies of such administrative documents as seal-impression registrations, family registers, and tax payment certificates, according to a survey conducted by a trade association for electronic commerce promotion.

The Electronic Commerce Promotion Council of Japan (ECOM), a nonprofit organization affiliated with the Ministry of International Trade and Industry, released in October its survey results on the use of electronic commerce in Japan. The survey was conducted of those who visited the ECOM booth at Direct Marketing Fair '96, a trade show held in September in Tokyo. (Respondents were primarily males aged 30 to 49.)

Up to JPY10,000 was selected as the amount most respondents would spend for a single online shopping transaction, followed by "up to JPY30,000" and "up to JPY50,000." Asked what were their primary concerns about using electronic commerce to make purchases, many respondents mentioned invasion of their privacy, possible differences between the online descriptions and the actual goods they might receive, and improper demands for payment.

ECOM was established in January 1996 for coordination of development of a common e-commerce platform, support of e-commerce trials, assurance of interoperability among applications, distribution of free software for e-commerce, and information exchange. ECOM currently has over 200 member companies, including banks, credit card companies, manufacturers, and publishing firms.

For details (in Japanese) of the electronic commerce survey results, see http://www.ecom.or.jp/misc/enquete/index.htm at ECOM's website.

In september, after a seven-month delay, justsystem finally released the Windows 95 version of Ichitaro, long Japan's best-selling wordprocessing package. Ichitaro 7, with a list price of about JPY40,000, rang up shipments of 1.1 million units in the first month, which was 50% higher than Justsystem's original projections. Because of the favorable initial sales, Justsystem announced that it was increasing its target for first-year shipments of Ichitaro 7 by one-third, from 3 million to 4 million.

To counter the popularity the new Ichitaro 7, Microsoft reacted by enhancing its sales efforts for Japanese Word for Windows 95. The result -- rare in Japan's normally polite arena of non-comparative advertising -- has been an unprecedented software sales and advertising war. Justsystem, in fact, went so far as to issue a press release charging Microsoft with "defamation."

Ichitaro 7 for Windows 95/NT comes bundled with the Japanese version of Netscape Navigator 2.0 as well as JustView and JustMail. (Justsystem offers an Internet access service, JustNet.) This effectively puts the Ichitaro 7 package in competition with Microsoft Internet Explorer and Microsoft Network, as well as with MS-Word.

Barely one week after the market debut of Ichitaro 7, Microsoft started offering the industry's first on-the-road training courses for Word 95. Using a specially remodeled bus, dubbed the "Word Car," that is equipped with facilities for training up to 10 persons simultaneously, Microsoft has started a nationwide Word seminar caravan. Microsoft's Word Car will visit major cities in Japan to provide local seminars in cooperation with Microsoft's distributors in each area. Microsoft will also loan the Word Car to companies and schools for special training session.

Meanwhile, Microsoft has released a Japanese version of its Internet Package for Word 95. The package contains the Japanese version of Microsoft Internet Explorer 3.0, a Microsoft Network (MSN) module, the Japanese version of Microsoft Internet Assistant for Word 95, and add-on English-to-Japanese and Japanese-to-English translation dictionaries.

It has been Microsoft's advertising emphasis on its claimed superiority of Word 95, compared with Ichitaro, that has created a stir, however, with ripples expanding throughout the industry. The blatant comparative thrust of Microsoft's advertisements goes beyond conventional Japanese advertising mores, in which an advertiser carefully avoids explicit criticism of its competitors' products.

According to Justsystem, Microsoft made defamatory remarks about the functions of Ichitaro 7 in the announcement of its new Word campaign. To express its displeasure, Justsystem took the rare step of issuing a press release claiming that Microsoft's statements were inappropriate and an indication of the "unfair characteristics" of Microsoft's business methods.

Instead of adopting a conciliatory approach, Microsoft -- in a highly unusual move -- responded to Justsystem's complaint by releasing (in late September) a 13-page product report that "objectively compares" the functions of Word 95 and Ichitaro 7. The evaluation items included user interface, menu customization, text layout, macro function, data conversion, accessibility to the Internet, and compatibility with other software. The report concludes that Word 95 is clearly suited for operation on the Windows 95 platform (which is, after all, the operating system developed by Microsoft), while Ichitaro 7 "suffers from some shortcomings."

The war of words (and building rancor) surely won't end there. For Justsystem, Ichitaro is its flagship product, one that has long had the largest share of the Japanese wordprocessor market. Meanwhile, Microsoft views Word as a key wordprocessing package, one that has acquired major market share worldwide (though not in Japan). The competition between the two companies, therefore, will remain fierce.

The two companies will likely continue to pursue very different marketing strategies. In contrast to Microsoft's showy "Western" marketing methods, Justsystem is sticking with conventional Japanese ways (such as frequently dispatching sales staff to local distributors). Time will tell which program functions, and which marketing methods, will be successful in attracting the larger share of Japanese consumers.

Nihon Net Launches Two E-mail Services

For business travelers, nihon net has started a Global Mail Account service that enables users to access their e-mail accounts on any Internet service provider (ISP) in Japan from overseas. With this service, overseas travelers will no longer have to make an international phone call or sign up with an ISP that has an access point in the user's location. Users of the GMA service can gain access to their e-mail accounts via 1,023 access points in 52 countries (as of November 1996). The GMA access is through Global One, a communications service company in Japan whose shareholders are Sprint International, Deutsche Telekom, and France Telecom. There is a service charge of JPY68 per minute, with an annual fee of JPY120,000.

Nihon Net has also started a Personal Mail Account service, an e-mail account service for persons in Japan who may already have Internet account with another ISP but want to have a second e-mail address with a different domain name. This service, which is available only within Japan, has an annual service charge of JPY6,000.

For information (in Japanese) on how to apply for either service, point your browser to http://www.nihon.net/global/.

AT&T eyes Japan's international phone market

In late october, AT&T applied to the ministry of posts and Telecommunications (MPT) for approval to enter Japan's international telephone market. The US telecommunications giant already has a presence in Japan with AT&T Jens, a leader in the Japanese Internet services market. It should be smooth sailing for the new AT&T World Access service, which will be provided by AT&T Japan; shortly after the application was filed, an MPT spokesman commented unofficially that the ministry has no objections to AT&T's plans.

The company's proposed service would take advantage of the market reality that calls from the US to Japan are considerably cheaper than those from Japan to the US. AT&T, therefore, expects to obtain a considerable pricing advantage vis-a-vis the three Japanese international carriers by utilizing a callback system to take advantage of the difference in rates. (For more about how callback works, see "Callback Challenges the Status Quo" in our April 1996 issue, page 29.--Ed.)

AT&T reportedly will provide corporate users with a dedicated adapter free of charge. When the adapter is connected to a phone, the callback process is transparent to the caller, allowing users to make international calls with the new service in the same way they do now with calls placed via KDD, IDC, or ITJ.

AT&T initially will offer the new service to its card users, mainly American ex-pats living in Japan. It's eventual main target will be corporate users, who account for nearly 40% of Japan's annual JPY100-billion-plus international telephone market.

As of press time, AT&T declines to confirm details of its planned service, saying that it is company policy not to comment on "rumor and speculation." According to the Nihon Keizai Shimbun, however, AT&T will charge from 36% to 50% less than current Japan-to-US rates. The paper also reported that AT&T intends to provide low-cost service to third countries from Japan by routing the calls via the US using the same callback method.