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Hakuhodo, Toyota Form Digital Content JV

Japanese advertising agency Hakuhodo Inc. and Toyota group trading company Toyota Tsusho Corp. have set up a joint venture to sell and distribute digital entertainment content via the Internet.

Hakuhodo, Japan's second-largest advertising firm, owns a 66 percent controlling stake in the new company, Indivisio Inc.

Nagoya-based Toyota Tsusho, an industrial products broker and global exporter of Toyota vehicles, holds the remaining 34 percent.

Indivisio, which opened for business on July 1 with a staff of eight, has taken over management of the "Franken entertainment download" Web site that Hakuhodo and Toyota Tsusho had been operating jointly on a test basis since late last year.

"Since Franken was first opened to the public in November 1998, the market response has been tremendous," said Hiroshi Kobata, president and CEO of e-Parcel LLC.

Kobata, who is an Indivisio board member, added that, "With Indivisio's new-found independence, flexibility, and speed, we can better serve this market."

U.S.-based e-Parcel, originally funded in 1996 as a division of Mitsubishi but spun off in April 1998, specializes in customized software solutions for mission critical deployment of data over the Internet.

Toyota Tsusho, which in addition to its other business endeavors also provides information technology services in Japan, is an e-Parcel investor and the main distributor of e-Parcel software products in Japan.

e-Parcel supplies the Internet data delivery technology, know-how, and expertise that form the core of Indivisio's operations.

"e-Parcel's technology and leadership has spearheaded our business success into the Internet market," said Yojiro Shirakawa, CEO of Indivisio. Shirakawa had previously led the Franken Web site as manager of Hakuhodo's Multi-Media Advertising Division.

Franken currently carries about 300 items, ranging from digitized comics from publishers Kodansha and Shueisha to animations, illustrations, and music.

Indivisio said it will eventually offer more than 1,000 items through Franken, which is already one of Japan's most popular digital entertainment sites, reportedly logging a daily high of nearly 600,000 page views.

To purchase an item from Franken, customers must first download and install e-Parcel's electronic delivery and copyright protection software from the site.

e-Parcel's data delivery, e-commerce, and e-logistics service monitors Franken transactions in real-time, enabling Indivisio to determine, for example, the date and time each recipient was authenticated, when downloading of data began and ended, and even whether the data was opened or moved after delivery.

"By outsourcing the critical areas of content management and distribution, billing, and payment collection [to e-Parcel], we can be assured that the technology providing all of these transactions will be kept up to date," said Indivisio's Shirakawa.

In addition managing Franken, Indivisio plans to distribute electronic catalogs, cooperate with Hakuhodo on the planning, creation, and placement of Internet advertising, and offer Web site management services.

"Through Indivisio, we will expand the e-commerce and e-publishing business to many areas of business in Japan [including] manufacturing, finance, insurance, publishing, printing, trading, and others," said Indivisio board member Nobuhiro Watanabe, director of Toyota Tsusho.

Indivisio has set an annual sales target of 6 billion yen (US$49 million) within five years.



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