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Japan Internet Report No. 67 Fall 2002
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In this issue:
- Japanese education and the Internet
- Interview with Rich Chen of Google
- Gloom and Doom Part Trois
- Japan Entrepreneur Report to debut
- Jerk of the month?
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Japanese education and the Internet
I've been thinking a lot about education lately and this recent comment from Heizo Takenaka, chief of the Financial Services Agency, made me snap to attention:
"The biggest problem with education in Japan is that adults don't study."
It's not surprising that adults here, after enduring a 12 to 16 year long "exam hell" based largely on the ability to perform rote memorization, want nothing more to do with schooling once they graduate and enter the working world.
This is sad, given that the proper role of secondary education is to inspire the student with the curiosity and desire to continue lifelong learning, not merely memorize a prescribed set of facts. Japan's"classroom collapse" phenomenon, whereby students ignore teacher instructions, sometimes to the extent that order in the classroom breaks down completely, may be due in small part to the lack of a continuing education requirement for teachers.
Continuing education courses certainly help teachers keep up with the latest instructional and classroom management techniques, but more importantly, they help instructors recognize and adapt to the changing social and psychological environment in which their students live and learn. In the U.S., holders of teaching certificates are usually required to take continuing education courses throughout their careers in order to keep their certificates valid. If teachers themselves are not committed to lifelong learning, why should their students be?
Getting back to the subject of adult education: Japan's stagnating economy is forcing workers to consider continuing or extending their educations out of concern for sheer survival, if not a love of learning. This would seem to point to significant opportunities in sectors such as remote instruction, online learning, and adult education. English language study is one of the popular choices for adults here who go back to school, and over the past several years I've met with or reviewed business plans from a number of entrepreneurs involved in online English language learning ventures.
But many of the people I've heard from are operating from what I call a"platform-driven" or "idea" model of starting a business. They start with a platform (such as the Internet or mobile phones), then pose the question: How can this platform be used to offer a needed product or service?
In my view, this "platform-driven" approach is backwards. Rather, the entrepreneur should start with an actual need, problem, or annoyance, then go about developing or identifying the best way to solve it, selecting the "platform" or "idea" after defining the situation in need of improvement.
For example, a number of entrepreneurs have been intrigued with the idea of offering English language learning tools and applications via Internet-enabled mobile telephones. Under a platform-driven mindset, the idea sounds quite compelling.
But a reality check shows that the idea that people will use mobile telephones to practice aural language learning is misguided. Consumers in Japan generally use Internet-enabled mobile telephones in very public places, and the last thing they want is to be overheard mispronouncing foreign words.
Moreover, in general people here use Internet-enabled mobile telephones to play or accomplish quick errands rather than to study or work. Entertainment and amusement, rather than education and self-improvement, are overwhelmingly the mainstream applications. I've quoted whoever said this before, but here it is again: As a general rule, PCs are for people who want to save time; cellular phones are for people who want to waste time. Therefore mobile telephone handsets are generally not well-suited even to text-based language learning applications.
Less dazzling but more practical approaches to language learning delivered via the Internet are starting to appear, however. This summer I visited one of them: Language Learning Solutions (www.oregonlls.com), a company that is taking a "proficiency"-based approach to language learning and assessment.
The basic problem that LLS solves is that it allows foreign language ability to be accurately assessed based on a proficiency standard (how well the student can actually use the language) rather than a normative standard (how well a student performs against other test-takers). This is important, since essentially all foreign language learning programs in the United States are moving toward proficiency-based standards for the three key learning program areas: Content, Performance, and Assessment/Measurement.
"LLS is the only firm in the U.S. that provides language assessment and learning tools in reading and writing to schools to enable the teaching of proficiency in Spanish, Japanese, French and German through a standards-based approach in a cost effective and time saving manner," according to President Dave Bong. "All of our assessment and learning tools are provided over the Internet, which allows us to distribute efficiently to both rural and urban schools nationwide and conduct grading remotely and in a timely manner."
I tried out LLS's Japanese-as-a-foreign language online testing and grading tools, from both student and instructor standpoints, and was favorably impressed. This seems to me to be a company poised to do well in a sector that definitely needs help: foreign language learning in the United States. Bong and his team are also pursuing opportunities for English language learning in Japan, and say they are currently consulting with some Kanto area English schools. It may be that they could use some partners in Tokyo (no, I'm not an investor in LLS).
Last year the government here vowed to spend billions of dollars on its"e-Japan" project to build out high-speed Internet access infrastructure by 2005, including Internet access for all public secondary schools. Wiring of all public secondary schools was completed in April of this year, but problems remain. One member of an educational council in the Kansai area found that Internet-connected PCs at a number of local schools were covered with blankets, and were only uncovered and used during administrative inspection visits, according to a recent magazine article. The same article quoted teachers elsewhere in the country saying that PCs at their schools were covered with chalk dust, or that most of their machines were running MS-DOS, and that the only instructor who could operate them had been transferred, etc. So there has been tremendous progress in terms of hardware buildout, but application infrastructure and diffusion of expertise lags.
Sounds like they could use some help from companies like LLS.
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Interview with Rich Chen of Google
Over the last couple of months we've enjoyed breakfast here in Tokyo, plus a number of telephone and e-mail conversations with Rich Chen, Google's International Product Marketing Manager. Rich is an extremely sharp, accomplished fellow who is well versed not only in marketing, finance, and technology, but in the on-the-street lessons learned from founding and running a Japan-specific Internet venture. He also happens to be one of the few Americans on the international Internet scene who is also a native speaker of Japanese. Most important, he's an all-around Good Guy, and this month was kind enough to share his thoughts with JIR readers about Google's approach to the Japan market.
- Are news organizations upset about the new Google News?
No. In fact, we've received inquiries from hundreds of news organizations wanting to be added to our automated crawl process for news. It's very much a win-win arrangement for news publishers, because we drive traffic to their Web sites - we only host the headlines - and they get to monetize them via advertising and premium memberships. You have to remember that the news stories themselves will always have to be created by a human being, and we are just in the business of connecting those publishers to searchers.
- Please explain, in a way that a five-year-old could understand, the reasons Google works so well.
Google works well because Google is good at gathering lots and lots of information from the Web. We index approximately 2.5 billion Web pages. Google is also good at figuring out which information is better. We use PageRank and over 100 other Web page attributes to determine the most relevant search results. Finally, Google is good at finding the information very, very fast. To this end, we operate over 20,000 servers, serving query results within milliseconds.
- How important to Google is the Japan market? What percent of your worldwide users are from Japan?
Japan is an extremely important market for us, given the number of Internet users, demand for high quality search, and the size of the advertising industry. Of the over 150 million searches we perform daily, Japanese is the third most popular query language. And our i-mode search site processes over 100,000 queries per day, making it the most popular mobile gateway we run.
- Have all the problems with searching and categorizing double-byte text strings essentially been overcome? How can a U.S. company cope so well with double-byte languages such as Japanese, Chinese, and Korean?
A technology-driven company like Google never considers anything 100%overcome! I think that our never-ending quest to organize and deliver all the world's information, when and where you want it, and in whatever language you want it, will eventually bring us somewhere close to how artificial intelligence is described today. A lot of our PhDs certainly think so.
We have a team of engineers and linguists dedicated to continuously improving the quality of our search in all languages. We are very much a global company, supporting 86 interface languages. We have the world's best engineers and linguistics experts constantly obsessing over, say, proper segment parsing of CJK languages!
- Industry insiders say Yahoo Japan now makes more money from auctions than from advertising. What is the secret to survival when you're sticking to a "search functionality only" strategy?
Actually, we have a very diversified revenue base, all of which is anchored around the provision of highest-quality search results.
First, we provide the search functionality to our Web site partners, including portal sites such as Yahoo! Japan and corporate sites such as Sony. Second, we have built a very robust advertising business around search functionality. We have both the CPM-based Premium Sponsorships, and the recently introduced CPC-based AdWords products. And thirdly, in the U.S., we offer the Google Search Appliance, which is a hardware-based solution enabling corporations and government agencies to search documents and information behind firewalls.
So, even though our businesses are all related very closely to search, the revenue sources themselves are highly diversified. And we'll continue to innovate our way to more revenue sources.
- A lot of people say that Japanese people don't want to search for information, they want it to be pre-filtered and served to them. How do you feel about that?
I think that's true to some extent, with traditional Japanese media doing a fine job of reaching out to that audience. But looking at the volume of search and the sophistication of the search terms on these queries, I'm convinced that more and more Japanese people are willing to reach out to *search* for information, rather than wait for it be fed to them. Government reports showing that the time spent online is inversely related to time spent watching TV suggest that this is really happening.
- Google has a reputation for playing its cards close to the vest, so to speak. What can you tell us about the company's plans for Japan going forward?
We'll be focusing on delivering bread-and-butter execution on our core search and advertising business here in Japan, by building upon our successful Web partner, ad agency, and user relationships.
There are entire segments in the Japanese business landscape, particularly small businesses, which are completely underserved by existing online advertising products. We'll be spending quite a bit of effort introducing our products to these companies.
And having said all that, it's important to note that we are continuously innovating our way into new products and services. Hopefully we'll be able to announce some of these very exciting projects soon.
- Word on the street has it that Overture is hiring fast and furiously in Japan. How do you see the competition shaping up here?
I think that's great news. Given that the market for this type of online advertising is still in the early stages of growth, there's quite a bit to be gained for all companies by growing the market. We have advertisers in the U.S. where a single advertiser runs over 10,000 different versions of their ads - "Buy toasters at XYZ.com," replacing"toaster" with any number of their products - and they recognize how well it works because it didn't cost a ton of money to create the different versions. Advertisers here are still trying to figure this out, and the more people there are out there to make this happen, so much the better.
Having said that, I think there are some fundamental differences in the way we approach the market. First, we have been offering Japanese-language search since 2000, keyword-based Premium Sponsorships since 2001, and cost-per-click AdWords advertisements since July. I think our early commitment to the Japanese market is reflected in the trust we've established with our users, advertisers, and portal partners.
Secondly, we're much more than just an ad network. We've partnered with the top Web sites in Japan, but we also place serious emphasis on technological and linguistic R&D. You mentioned the handling of double-byte characters earlier; we really are built from ground-up to address the specific linguistic needs of each of our markets, and it shows in our ability to provide superior performance for our advertisers.
- Google has operated in almost a stealth mode here in Japan. Why is that?
It hasn't been by design! Given the very high expectation that our users and advertisers have for us, we've been directing all of our resources to improving our products and services. We would be very happy to explore ways we can become more visible in the marketplace!
Richard Chen
International Product Marketing Manager
Google
rchen@google.com
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Gloom and Doom Part Trois
Alex Kerr, author of the stunning book entitled Dogs and Demons: The Fall of Modern Japan, gave an equally stunning presentation to a sold-out luncheon sponsored by the American Chamber of Commerce in Japan (www.accj.or.jp) at the Capitol Tokyu Hotel here in Tokyo Thursday, October 10.
Kerr's basic point is that government bureaucrats here chronically erect wasteful monuments ("demons") rather than make the small, painstaking changes ("dogs") necessary to actually address underlying problems and raise the quality of life in Japan. The result is a sterile urban landscape, poorly designed buildings and public spaces, degradation of the physical environment, cultural malaise, and much more. We examined how Kerr's findings apply to the Internet in the Spring 2002 issue of Japan Internet Report (www.jir.net/jir5_02.html).
To illustrate his points about design and cultural decay, Kerr showed slides comparing the architecture and interior designs of hotels in Bangkok and Kyoto, respectively. He prefaced his comparison with the challenge to "guess which is the developing country."
This remark drew a big laugh, and the comparison that followed was an eye-opener: The exquisitely designed Bangkok hotels drew their inspiration from the nation's rich cultural heritage and artistic motifs, utilizing domestically-procured building materials and natural landscaping. In contrast, the functionally-adequate-at-best Japanese hotels resembled factories or offices, using almost exclusively concrete and chrome as building materials while featuring fluorescent lighting and artificial plants, seemingly doing their best to deny any authentic link to traditional Japanese art, history, architecture, or even sense of place.
It was a stunning juxtaposition, to be sure. But thinking back on the event, it occurred to me that Kerr and all of the rest of us in the room were viewing the comparison from a highly privileged position. Certainly architecture and the urban landscape are important elements of the quality of life of a nation, but most of the world's population must measure quality of life along much more basic metrics, such as life expectancy, availability of public education, crime rates and drug usage, poverty levels, availability of reasonable-quality, reasonably-priced medical care, safe food and water supplies, disease eradication, literacy levels, and so forth. On a "balanced scorecard" of quality of life as measured by these basics, Japan would no doubt surpass most, if not all, the nations of the world.
It also occurred to me, and I hope to others who forked over the yen equivalent of U.S. $60 to attend the luncheon, that Thailand's economy depends far more heavily on tourism than does Japan's, yet the only people who can afford to stay in those beautiful Bangkok hotels are tourists - and a few wealthy Thais. Yet a substantial number of Japanese citizens can afford to stay in those less-than-ideal hotels that Kerr so effectively critiqued.
So as much as I agree with Kerr's observations and conclusions, in the broader scheme of things, Japan has been doing a lot of things right. For some reason, we Westerners seem to hold Japan to a higher standard than other nations, not only for "quality of life," but for just about everything else.
All this has certainly give me cause to reflect, and to rethink the Doom and Gloom comments I made this past Spring. I chatted with Mr. Kerr before and after the luncheon, and he graciously signed my copy of Dogs and Demons. When I got home I somehow felt he already knew what I was going to write here today, and was pleased to read the following inscription:
"In spite of all this...with hope."
And that's all I have to say about Doom and Gloom.
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Japan Entrepreneur Report to debut
Next month all current subscribers will receive the inaugural edition of Japan Entrepreneur Report (JER) instead of Japan Internet Report (JIR). JIR is going on hiatus for the time being. Japan Internet Report has always been more about Japan than the Internet, and I am very much looking forward to keeping the new JER focused squarely on Japan while expanding coverage beyond technology and the Internet to emphasize new businesses, both online and off. Not to worry; both technology and the Internet will remain central to Japan Entrepreneur Report as well. Back issues of JIR will remain archived at www.jir.net/archive.html and you can always reach me at <tim@jir.net>. I hope you will stay with us.
This change is one result of my recent departure from Ion Global Japan (www.ion-global.co.jp) and the beginning of a self-supporting sabbatical to focus on writing projects. For Japan-specific professional service help from Ion Global in the United States, please contact Steve Kemper at <steve.kemper@us.ion-global.com>. For help in Tokyo, please contact Jonathan Nagao at <jonathan.nagao@jp.ion-global.com>.
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Jerk of the month?
As my buddy Jeff Char from J-Seed (www.j-seed.com) says, if I used the JER acronym to incorporate in Japan (form a Kabushiki Kaisha, or K.K.), I could be known as the head of JERKK or Head Jerk for short. I guess that would just formalize it, eh Jeff? See you next month!
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Tim Clark
Editor
Japan Internet Report
tim@jir.net
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Copyright 2002 by Ion Global. All rights reserved.
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