JAPAN: Livedoor’s Horie, Man the Media Loves to Hate

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Mar 25 2005 (IPS) - The typical reaction when something jolts staid and homogenous Japan is to blame it on the insensitive foreigner. But the ongoing saga played between a new Japanese Internet business and two well established broadcasting companies is otherwise proving to be quite shocking.

At the centre stage is Livedoor, the fastest-growing Web portal in Japan with 10.6 million users, which plans to use its 50 percent stake in Tokyo-based Nippon Broadcasting System Inc. to acquire Fuji TV – Japan’s biggest media group. Livedoor intends to build a colossal entertainment and information network that spans the Internet and broadcasting mediums.

”Perhaps the best story among the many issues involved in the fight by newcomer Livedoor to acquire the stakes of Fuji television, is that we see a young Japanese businessman spearheading it all,” said Yasuo Kurata, an international relations expert and a veteran journalist.

And indeed, Japan is all agog at the merciless fight led by Takafumi Horie, 32, president of Livedoor.

Livedoor had 49.8 percent of Nippon Broadcasting’s voting rights as of Mar. 15, giving it potential influence over Fuji TV through the company’s stake in the television company. More than 50 percent is required to be able to make key decisions such as appoint directors to the board.

Nippon Broadcasting is listed as Fuji TV’s largest shareholder with a 22.5 percent stake.

Horie won a key legal victory last week when the High Court blocked Nippon Broadcasting’s plans to issue massive amounts of new shares to Fuji TV that was desperately trying to stop Livedoor from gaining control.

Previously, unthinkable to close-knit Japanese management practices, Horie had used a loophole in security regulations to buy over 50 percent of Nippon Broadcasting shares in off- hours trading without the knowledge of the media company.

”Horie has shaken deep-rooted Japanese management policies that relies on cozy personal relations rather than transparent shareholder debate,” Prof. Takaaki Hattori, who teaches media law at Rikkyo University, pointed out.

For many, the no-holds-bared battle for ownership of an established company by a newcomer who has only recently created a name for himself, mainly by displaying an awesome talent for buying and selling companies rather than journalistic skills, is symbolic of the much needed reform in Japan for takeovers and mergers of media companies.

Hattori explains that Horie ushers in an acid test on Japan’s ability and determination to foster changes in Japanese practices that prefer to sweep problems under the carpet.

”It is the public and no one else that should be able to decide whether they prefer digital Internet broadcasting, that Horie plans to establish, or conventional radio and television programs,” he told IPS.

Hattori was scathing of the Japanese people’s approach to media companies.

”For too long they have allowed these companies’ top-heavy management to dictate what people can view and read. These media companies have just bulldozed through everything,” he added.

Japanese editorials on Horie, too, have been overwhelming bitter.

Horie who has been branded as a ”newcomer” and ”maverick” by commentators in the Yomiuri group – Japan’s largest newspaper chain – hinted darkly on Feb. 25 that ”Livedoor’s buyout attempt is not a mere issue of share trading – it involves the issues of freedom of speech and expression.”

Early this week the ‘Daily Yomiuri’ said Horie was ignorant of the role of journalists. It quoted him as saying: ”Journalism, which was needed when there was no Internet, is no longer necessary…The media are merely conduits. The best thing for the media to do is to transmit information as it is.”

Japan’s racy tabloid weeklies have also gone to town on Horie revealing how he dropped out of the prestigious Tokyo University to start Livedoor, and even appeared without socks in a prime time news show – all trademarks of Japan’s ”shinjin rui” or new generation that pays more attention to personal fortune than famed Japanese values such as loyalty and human relationships.

Adding to the fear environment are media reports that show how Horie made his fortune trading in companies he made profitable by firing staff and wiping out redundant departments.

Even the Japanese government it seems has jumped on the bandwagon. Last Friday, it delayed the passing of a law that would ease restrictions on foreign involvement in the takeover of Japanese companies.

But Horie’s ratings among the baby-boomer generation, many of who are slaving away as salary men in companies, remain high. Eighty percent of aging baby-boomers in a recent poll have given him the thumbs up, as they watch with envy the unconventional behaviour of the younger Japanese.

”Horie is the long needed wake up call for Japan,” said Ken Ishiyama, 43, who runs his own translation company. ”I like him because he is challenging vested interests. But at the same time, I guess I would not feel secure working for such a forceful person.”