Facebook May Not Be Dominant in Japan, Zynga Says

Facebook Inc. may not overtake Mixi Inc. in Japan as the lure of connecting with friends overseas isn’t enough for users to switch services, according to the U.S. social-networking site’s biggest games developer.

Japan “is one place where Facebook may not end up being dominant,” Robert Goldberg, head of Zynga Game Network Inc.’s operations in the country, said in an interview in Tokyo. “Despite the unique cultural challenges that Japan presents, we fully expect Facebook to be successful in this market as they have across the world.”

Facebook, boasting more than 500 million users and a valuation above $80 billion, is focusing on expanding in Japan and Russia, Chief Executive Officer Mark Zuckerberg said in July. Mixi, which began social network operations in 2004, has about 22 million customers in the country, 10 times the number of Japanese Facebook users.

Concerns over privacy issues and early problems with site design and translation have also set back Facebook’s popularity in the country, Goldberg said.

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

‘Hard to Change’

“Networks are kind of funny, they get an imprint on them when they get designed and it’s pretty hard to change,” Goldberg said.

Facebook, available in more than 70 languages, almost doubled its subscriber base in Japan in the past six months to about 2.2 million, according to market researcher Socialbakers. The country ranked 49th in terms of total users registered for the service, with the U.S. topping the list at 148.9 million.

“We are excited to see that more Japanese people have been choosing Facebook as a platform to connect and share with their friends and family over the past year,” said Kumiko Hidaka, a Palo Alto, California-based spokeswoman at Facebook.  “More brands, celebrities, and organizations are increasingly coming to Facebook to engage with their audiences also.”

Job Search

The company opened an office in Japan in September and a month later introduced an application that assists Japanese university students with their job search process, Hidaka said. The service, only available to people in Japan, helps students to find and connect with alumni, friends and classmates interested in similar companies and industries, or those who have already accepted job offers, she said.

Zynga chose Mixi for the Japan release of its “FarmVille” hit title in December. The game is Facebook’s second most popular title with 53 million users, after Zynga’s “CityVille” with 98.6 million, according to researcher AppData.com.

Goldberg declined to disclose the user numbers for FarmVille in Japan.

Mixi is better suited for Japanese users because it gives subscribers more control over who sees their content and personal data is more secure, President Kenji Kasahara said in an interview on Dec. 15. Users can also send Twitter-like messages limited to 150 characters, a service that began in September 2009 and isn’t available on Facebook, Kasahara said at the time.

Masashi Tokuda, a Tokyo-based spokesman at Mixi, said the company’s stance hasn’t changed since Kasahara made the comments.

Shares Decline

Mixi fell 5.8 percent to 427,500 yen at the 3 p.m. close of trading in Tokyo, compared with a 0.5 percent gain in the benchmark Nikkei 225 Stock Average. Zynga is closely held.

Mixi’s monthly active users, subscribers who log in at least once a month, have reached 14.5 million as of Dec. 31, the Tokyo-based company said earlier this month. That compares with Facebook’s more than 500 million users worldwide and 24.5 million for DeNA Co., Japan’s biggest developer of social games for mobile phones.

“Japan is a unique marketplace and it is necessary to take care when bringing a global product and localizing it to the Japanese culture,” Goldberg said.

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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