TOKYO — In 2001, a fledgling Internet company named Google opened its first overseas office in Japan, eager to tap a huge, tech-savvy market.
But after eight years, Japan is one of a few major countries Google has yet to conquer. The Web giant still trails far behind Yahoo Japan, the front-runner here, operated by the Japanese telecommunications giant Softbank.
In a reversal of the rivalry in the United States, Yahoo Japan dominates Japan’s Web search market with 56.5 percent of all queries, according to the Internet research company, GA-Pro. Google, at 33.7 percent, is a distant second.
Unaccustomed to being second, Google is bending some of its most time-honored traditions in a renewed push into the Japanese market. Earlier this year, Google’s splash page for Japan abandoned the company’s classic spare design and added links to YouTube, Gmail and other services — an attempt to lure Japanese users who favor sites decorated with a cacophony of text and graphics.
And in a first for Google, it initiated branding ads for Japan and staged attention-grabbing publicity stunts, including one in which it invited passers-by to float into the air with the help of 2,500 balloons.
Google’s dogged interest in Japan has partly to do with sheer size. Japan is one of the world’s most wired countries, with more than 90 million regular Internet users — of which three-quarters use fast broadband connections and two-thirds also log in from cell phones.
And despite a sluggish economy, Japan’s $77 billion advertising market remains the world’s second-largest, one that an increasingly global advertising force such as Google cannot afford to ignore.
“Japan is absolutely a key market for Google,” said Koichiro Tsujino, president of Google Japan. Every day, for example, Japanese view 10 million clips on YouTube, Google’s video-sharing site — and that is just from their cell phones, making them the world’s most avid adopters of video on-the-go. “Japan leads the world in many ways,” he said.
That Japanese propensity to try new things is the other reason Google is intent on staying put in Japan. Over the years, Japan has become a testing lab for many of the Web giant’s cutting-edge new ideas, especially in mobile technology. Google’s Tokyo-based programmers, immersed in Japan’s mobile and Web culture, have become a valuable source of ideas for the entire company.
Overseas markets account for half of Google’s revenue, and the company is becoming more keenly aware of the need to tailor its services to local markets, as well as the advantages of absorbing ideas from outside the United States, company executives say. “Japan made us realize that non-U.S. ideas can go global,” David Eun, a vice president for Google, said on a recent trip to Japan, where he closed deals with two Japanese broadcasters to allow YouTube to run some of their content.
