Mixi Counts on Privacy, Greeting Cards to Fend Off Facebook Push in Japan

Mixi Inc., owner of Japan’s largest social networking service, expects to fend off Facebook Inc. because its website is better suited to domestic users and personal data is more secure, President Kenji Kasahara said.

“Facebook’s service emphasizes connection to users overseas, stresses openness over privacy and doesn’t reflect regional characteristics,” Kasahara, 35, whose stake in the company is worth about $479 million, said in an interview in Tokyo on Dec. 15. “Our users value a social space that is like a living room -- private, comfortable and personal.”

Mixi, whose shares have tumbled 39 percent this year, is adding games and expanding to smartphones to revive earnings after profit fell for three of the past four quarters. Facebook Chief Executive Officer Mark Zuckerberg in July said the company is focusing on expansion in Japan and Russia this year, increasing the pressure on the Japanese company to introduce new features to protect its lead.

Mixi, which began social network operations in 2004, has fallen 71 percent since its initial public offering in 2006 and traded 0.5 percent lower at 443,000 yen as of the 11 a.m. break on the Tokyo Stock Exchange. The company competes against Gree Inc. and News Corp.’s MySpace.

Photographer: Tomohiro Ohsumi/Blomberg

Kenji Kasahara, president of Mixi Inc. Close

Kenji Kasahara, president of Mixi Inc.

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Photographer: Tomohiro Ohsumi/Blomberg

Kenji Kasahara, president of Mixi Inc.

Closely held Facebook introduced simpler privacy controls in May and said it was reducing the amount of user information that’s publicly available after lawmakers and advocacy groups complained that the service shares too much personal data.

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Mixi gives its 22 million subscribers more fine-grain controls over who sees their content, such as allowing the users to disclose information to individual friends, Kasahara said.

Jonathan Thaw, a spokesman for Palo Alto, California-based Facebook, didn’t immediately respond to a phone call and e-mail seeking comment.

Mixi was Japan’s 12th most popular website, compared with Facebook.com’s 18th place, according to Alexa Internet Inc., a Web traffic-monitoring company owned by Amazon.com Inc. Facebook ranked second after Google Inc.’s search in the U.S., Germany, France and the U.K., while topping the list in Indonesia, Malaysia and Philippines.

The Tokyo-based company earlier this month introduced Zynga Game Network Inc.’s “FarmVille,” Facebook’s most popular game, and is improving tools to help developers make applications for its network. Mixi in September began offering services that match Facebook’s “Like” and Foursquare Labs Inc.’s check-in functions.

Twitter-Like Messages

Mixi offers a traditional year-end greetings card service with Japan Post Service that allows users to send physical post cards to social network friends. About 3.5 billion postcards were exchanged in the country last year, according to the postal authority.

Mixi users can send Twitter-like messages limited to 150 characters, a service that began in September 2009 and isn’t available on Facebook.

Facebook’s expansion in Japan may not necessarily lead to a drop in Mixi’s market share. Facebook in October allowed simultaneous sharing of pictures and comments for users that link their accounts to Mixi. The Japanese company also allows linking to Twitter Inc.’s microblogging service.

“It’s possible for two networks to co-exist,” Kasahara said. “We are focusing on making our service easy to use for Japanese.”

To contact the reporter on this story: Yoshinori Eki in Tokyo at yeki@bloomberg.net; Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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