Early last month, Mixi CEO Kenji Kasahara came under intense pressure. That was on the day that his company, Japan's biggest social-networking operator, announced its financial results and forecast for the year: Its profit would fall by 15 percent from the previous year, the first such decline in growth since the company went public. To be sure, the worst recession in decades is hitting hard. Yet, investors were not happy over the company's uncertain prospects. "The message was disappointing," said Hiroshi Yamashina, an analyst at Nikko Citigroup.
This is a watershed moment for Mixi, one of Japan's most successful "Web 2.0" darlings. But lately its profit has been flat, while its growth in the number of page views and members is slowing. Acknowledging the need for new sources of revenue, Kasahara recently unveiled a landmark plan, calling it "Mixi's biggest change since its launch." The company is now opening its PC and mobile platform to third-party developers, and new applications created by them are expected to become available this summer on its site. It will also lift its invitation-only system later this year.
"We have grown as a communication service with the online diary tool in the main. But will that be sufficient (for our growth) in the next five years? We do not think so. We will offer a variety of applications for communication, (and try to appeal to a wider audience)," he told The Japan Times earlier this month. With this shift, Mixi is aiming to rely less on ad revenues and more on fees people pay for the use of new applications.