Japan’s Top 10 Net Stories for 2000

[ASIA] Whether you considered 2000 to be the end of the 20th century or the beginning of the 21st, there is no doubt that for Japan it signaled the start of a new Internet era.

It is an occupational hazard of journalists working on deadline that we often “can’t see the forest for the trees.” So taking a step back to view the millennial “forest,” here are my own “top 10” picks of Japan Internet Net news.

1. Wireless Internet undergoes explosive growth

NTT DoCoMo’s i-mode wireless Internet service grew fivefold in 2000, from about 3 million subscribers at the end of 1999 to 15.4 million subscribers as of November 30. When competing services–the au Group’s EZweb (4.6 million subscribers) and J-Phone’s J-Sky (4.0 million subscribers)–are added to the equation, Japan’s wireless Internet population at the end of November 2000 was 24 million.

2. Low-cost, high-speed Net access options proliferate

In spring 2000, NTT’s regional carriers began nationwide expansion of their ISDN Internet access service, which was launched on a trial basis in 1999. Their flat-rate, 64K-bps FLET’S ISDN service grew from just a few thousand users at the end of 1999 to more than 160,000 subscribers. The last few months of 2000 also saw incipient growth of broadband home Internet access. Though there were just 6,000 ADSL subscribers nationwide at the end of 2000, the market is poised for rapid expansion as government pressure has finally forced NTT to open its lines to rivals at a reasonable cost.

3. Convenience stores become e-commerce middlemen

In what has been termed a “unique Japanese-style of e-commerce,” convenience stores are merging Internet sales with their traditional business. Led by Seven-Eleven and Lawson, Japanese convenience stores have installed in-store multimedia kiosks and launched Internet shopping sites. Shoppers can select the goods they want online and arrange to pay for and even pick up the merchandise at a neighborhood store.

4. The Internet goes to court

Several police actions and judicial decisions in 2000 involved the Internet, including: (1) a police raid of Yahoo Japan to gather evidence relating to online sales of pornographic materials; (2) the first Japanese court judgement involving a “.co.jp” domain name dispute; and (3) a court decision that held a software developer liable because his program was used for illegal purposes, even though he did not participate directly in the activity in question.

5. Applications and data find a home online

The market for application service providers (ASPs) and data center services expanded dramatically in 2000, with large and small domestic firms as well as prominent foreign firms gearing up for business in Japan.

6. Online trading hits new heights

Deregulation of brokerage commissions in late 1999 resulted in a proliferation of online trading sites and an intense price war to win customers. The number of online accounts in Japan grew tenfold in the first year following deregulation, surpassing 1.3 million in August 2000.

7. Several free ISPs and Internet phone services are launched

Tried in the mid-90s with poor results, the concept of “free access” finally began to take hold in Japan in 2000. Whether the “free access if you view our ads” business model will prove viable, however, remains to be seen.

8. Major electronics manufacturers begin direct online sales

Japanese PC and electronics manufacturers were long reluctant to sell directly to consumers for fear of alienating the retailers who sell their goods (some of whom threatened to pull the manufacturers’ products from their shelves). Unable to resist the e-commerce tsunami any longer, however, Sony, Toshiba and others finally embraced direct online sales in 2000.

9. Hackers hit Japan Web sites

In a wake-up call to Japanese business and government ministries regarding the need for security, 2000 sa

w a number of high-profile homepage defacements, server intrusions, and information leaks.

10. Japanese women come into their own online

The year 2000 saw the launch of several Web sites and online services targeting female users.

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