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6.13.2013

Mixi's New CEO - Is He Too Late To Bat?

As of 25 June, founder of Mixi, Kenji Kasahara will step aside from the helm and become Chairman, passing the baton to Yusuke Asakura, 30. Once synonymous with social networking, Nomura Research Institute estimates in its report released in November 2011 that approximately 9.7 million consumers have left Mixi, of the 23 million who they believe have used Mixi at least once in their lives.

Last I checked, Mixi was for humans,
but at the moment, their home page is full of pets!

Nomura estimates that there are 21 million FB users (active and non-active combined), while the figure for Twitter is 20.7 million. Compared to these "foreign players," Mixi definitely remains the biggest. Yet, as at end March 2013, Mixi posted a 5% decline in revenue due to stagnant advertising revenue growth.

At the May Strategy presentation, Asakura announced that there will be three strategic pillars for Mixi in the immediate future: (1) Increasing revenue both in and outside of the SNS Mixi; (2) Aggressive investment activities into external business opportunities; and (3) Nurturing entrepreneurs from within.

Currently, 90% of Mixi's revenue comes from the SNS Mixi, and about this, Asakura says, "Mixi has been making money on advertising revenue for mobile phones (pre-smartphones). That market is fast disappearing. It is obvious to everyone that there is a massive shift towards smartphones, but on the one hand, the smartphone advertising market is not as big as we had hoped it would become."

"Instead of waiting for the market to grow, it is imperative that we first build services that users are happy to pay for."

Mixi has announced that it will launch 50 apps by March 2014. At the moment, half of their paid-for apps revenue comes from games.

"There is still much more room for games to grow," says Asakura. But if we look to a slightly longer term future, we can see that as with (recipe site) Cook Pad, consumers will pay if they feel that the service features are of value. Mixi plans to release apps that are relevant to people's every day lives, too."

Asakura also says that Facebook and other SNS are not the only competition. "Be it the weather forecast or apps that help users find trains and make connections - whatever app is on the top screen of a smartphone is competition."

Asakura explains that the founder, Kasahara, is also undertaking a mission to create new businesses within Mixi. "The goal is not for us to increase our revenue from the current 12 billion yen to 15 billion yen. We want to grow exponentially and we hope to be able to create three or four new services that will be bigger than Mixi in the process," he says.

A 29-year old office worker looks back 7 years ago when she had just graduated from university and says, "When I was in college, everyone was using Mixi. But ever since I have begun to work, I continued with my public diary for a couple of years and kept in touch with classmates and friends, but "eventually, I was connected to too many people and that began to restrict what I could write."

Another woman, aged 33 says, "One of the reasons why I stopped using Mixi is because my friends stopped."

A man in his 30s says, "I have begun to use Facebook and could not see why I also need Mixi."

The Nikkei MJ summarizes that people who used Mixi to enhance their real life relationships have moved on to Facebook and LINE.

A marketer with a brand that has a Mixi page says, "At the moment, when we discuss online marketing, we start out by plotting what to do on Twitter and Facebook. We continue to update our Mixi page, but we question whether Mixi is the right platform to establish the kind of sticky relationship we hope to have with our customers on SNS."

Some analysts say that Mixi lost its edge when it failed to launch new services that fueled loyalty among its users. But others point out that the more than 100 million users is still a force to be reckoned with and it is not too late for Mixi to get back on track.

Mixi launched its Innovation Center in August 2012, and such services as the online album creator, Nohana, has come of it. However, there is yet to be a service that could be bigger than Mixi itself, and the market is split on whether Mixi actually has it in them to do it.

As mentioned by Asakura himself, the smartphone market seems to be reaching a plateau at the moment, and certainly, LINE and its wanna-be's have changed the landscape in that smartphones are phones only in name, and that they are more of a connectivity device.

This was taken in the "no mobile phones car"
of a train... Who said only the youths are addicted to
being on their mobiles?
Using Facebook messenger, LINE, Comm, and Viber makes email addresses obsolete. As Japan is not a GSM market where texting is dominant, mobile email was _the_ killer app for mobile phones, in addition to games. But now, all one needs is a phone number or Facebook account to chat and talk to friends.

A survey showed that mobile phone and smartphone users spend 50% of their time using the phones on games and SNS, but the other time is split among shopping, reading the news, listening to music, and watching TV (one seg).

Will Asakura and Mixi be able to come up with something in addition to the above? Or is Mixi already a thing of the past?

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Reference: Nikkei MJ 12 June 2013 interview with Yusuke Asakura

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