Third  Quarter,  Fiscal  Year  Ending  March  2014
Consolidated  Financial  Results

UNITED,  Inc.
(TSE  Mothers,  Code:  2497)

February  4,  2013 　 　 　All  of  the  opinions,  predictions,  forecasts  and  the  like  presented  in  this  document  are  those  made  by  UNITED,  Inc.  based  on  information  available  at  the  time  of  preparation  of  the  document,  but  no  guarantee  is  made  as  to  the  accuracy  of  this  information.  Actual  results  may  diﬀer  greatly  from  these  forecasts  due  to  changes  in  various  factors.  Company  names  and  product  names  presented  in  this  document  are  trademarks  or  registered  trademarks  of  their  respective  owners.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

1	

Table  of  Contents

1 　Quarterly  Consolidated  Financial  Results  and  Outlook  for  the  Full  Fiscal  Year
2 　Reference  Material

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

2	１ Quarterly  Consolidated  Financial  Results  and  Outlook  for  the  Full  Fiscal  Year

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

3	Our  Core  Operations

We  are  putting  eﬀort  into  the  smartphone  media  operations  and  RTB  advertising  operations  expected  to  see  market  growth  in  the  future,  actively  investing  in  these  operations  to  achieve  business  growth.

Media  segment

Smartphone  media  businessCore  Operations

Other  media  businesses(*1)

Advertising  segment

RTB  advertising  business(*2)

Investment  segment  (*3)

Venture  capital  business

Advertising  agency  business*1 Email  advertising,  internet  research,  sports  marketing*2 RTB  (real-‐‑‒time  bidding)  refers  to  a  mechanism  for  conducting  advertising  transactions  based  on  real-‐‑‒time  auction.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

4	

3Q  (October-‐‑‒December)  Results  Highlights

Overall

3Q  Results• 3Q  cumulative  (April-‐‑‒December)  operating  proﬁt  has  turned  around  ahead  of  schedule.  We  planed  it  in  4Q.
(Operating  proﬁt/loss:  2Q  cumulative  (April-‐‑‒September):  -‐‑‒38  million  yen  →  3Q  cumulative:  6  million  yen)
• Continuing  on  after  a  proﬁtable  2Q,  the  3Q  (October-‐‑‒December)  operating  proﬁt  remained  in  the  black  (44  million  yen).
• Sales  decreased  by  5%  over  the  previous  quarter.

Core  Businesses

Smartphone  Media  Business

RTB  Advertising  Business*1:*2:• CocoPPa  worldwide  downloads  reached  18  million  on  December  15,  2013  (*1).  As  new  revenue  streams,  we  have  started  selling  premium  content,  handling  tie-‐‑‒up  advertising  and  supplying  Sugotoku  Content®(*2).
• Sales  increased  by  4%  over  the  previous  quarter.
• The  3Q  cumulative  (April-‐‑‒December)  sales  from  the  in-‐‑‒house  advertising  platform  (*3)  grew  by  176%  year-‐‑‒on-‐‑‒year.

20  million  downloads  were  reached  on  January  26,  2014.

This  is  a  service  provided  by  NTT  DoCoMo  Inc.  where  a  select  basket  of  roughly  100  types  of  content  including  news,  weather,  games,  horoscopes,  etc.  can  be  used  unlimited  at  a  monthly  price  of  ¥399  (tax  included).  “Sugotoku  Content®”  is  a  registered  trademark  of  NTT  DoCoMo  Inc.
*3: In-‐‑‒house  advertising  platform  =  in-‐‑‒house  DSP  (“Bypass”)  and  in-‐‑‒house  SSP  (“AdStir”)
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

5	

3Q  Cumulative  (April-‐‑‒December)  Consolidated  P/L  Statement  (Year-‐‑‒on-‐‑‒Year)
3Q  cumulative  operating  proﬁt  went  into  the  black  (6  million  yen).  The  expansion  of  the  media  segment  due  to  mergers  contributed.

(million  yen)

3Q  Cumulative,  FY  ending  March  2014

3Q  Cumulative,  FY  ending  March  2013

Year-‐‑‒on-‐‑‒Year  Change  
(%)

Sales

4,339	

2,802	

+55%	 　Media  segment

2,180	

14	+14,997%	

 　Advertising  segment

2,047	

1,898	

+8%	 　Investment  segment

145	

889	

△84%	

 　Inter-‐‑‒segment  elimination

△33	

0	

-­‐	

Total  proﬁt  from  sales

1,180	

957	

+23%	

 　Media  segment

679	

10	

+6,375%	 　Advertising  segment

411	

255	

+61%	

 　Investment  segment

89	

691	

△87%	

Operating  proﬁt

6	

△52	

-­‐	

 　Media  segment

143	

△67	

-­‐	

 　Advertising  segment

△43	

△200	

-­‐	

 　Investment  segment

67	

437	

△85%	

 　Head  oﬃce  expenses

△160	

△222	

-	

Recurring  proﬁt

18	

△39	

-­‐	

Quarterly  net  proﬁt

△21	

△212	

-­‐	

・The  numbers  for  3Q  of  FY  ending  March  2013  are  the  proﬁt/losses  of  MotionBeat  Inc.  prior  to  the  merger  and  do  not  include  the  proﬁt/losses  of  SPiRE  Inc.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

6	

3Q  (October-‐‑‒December)  Consolidated  P/L  Statement  (Compared  to  Previous  Quarter)
Revenue  increased  in  both  the  media  and  advertising  segments.  Total  proﬁt  from  sales  decreased  due  to  increased  costs  in  both  segments  targeting  growth  in  4Q  and  thereafter.
(million  yen)

3Q  of  FY  ending  March  2014

Sales

2Q  of  FY  ending  March  2014

Quarter-‐‑‒on-‐‑‒Quarter  Change  (%)

1,615	

1,565	

+3%	 　Media  segment

837	

771	

+9%	

 　Advertising  segment

749	

716	

+5%	

 　Investment  segment

40	

93	

△57%	

 　Inter-‐‑‒segment  elimination

△12	

△16	

-	

Total  proﬁt  from  sales

432	

459	

△6%	

 　Media  segment

253	

259	

△2%	

 　Advertising  segment

143	

150	

△5%	

 　Investment  segment

35	

50	

△29%	

Operating  proﬁt

44	

70	

△37%	

 　Media  segment

61	

81	

△25%	

 　Advertising  segment

△2	

1	

-	

 　Investment  segment

28	

42	

△34%	

 　Head  oﬃce  expenses

△41	

△55	

-	

Recurring  proﬁt

43	

71	

△38%	

Quarterly  net  proﬁt

24	

52	

△53%	

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

7	Media  Segment:  Trend  in  Sales  by  Quarter
Sales  in  the  smartphone  business  decreased  by  5%  over  the  previous  quarter.  This  was  due  to  the  eﬀects  of  programs  to  diversify  “CocoPPa”  revenue  (see  page  18)  and  reduced  revenue  from  “apps  for  the  career  market.”  Overall  sales  for  the  media  segment  increased  due  to  strength  in  email  advertising  and  sports  marketing.
Sales  in  the  media  segment:  trend  by  quarter(million  yen) ■Other  media  businesses(*)■Smartphone  media  business

1,000

837

771
571
500

391

474

380

363

2Q  of  FY  Ending  March  2014

3Q  of  FY  Ending  March  2014

414

0

156
1Q  of  FY  Ending  March  2014* 　Other  media  businesses:  email  advertising,  internet  research,  sports  marketing

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

8	

Advertising  Segment:  Trend  in  Sales  by  Quarter
RTB  advertising  business  sales  increased  by  4%  over  the  previous  quarter.  Sales  from  the  in-‐‑‒house  advertising  platform  continued  their  growth  trend.

Sales  in  the  advertising  segment:  trend  by  quarter(million  yen) ■Advertising  agency  business■RTB  advertising  business

800

581
400

749

313

329

403

419

2Q  of  FY  Ending  March  2014

3Q  of  FY  Ending  March  2014

319

262
0

716

1Q  of  FY  Ending  March  2014

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

9	Full-‐‑‒Year  Projections  for  FY  Ending  March  2014
Following  a  proﬁtable  2Q,  operating  proﬁt/loss  for  3Q  was  also  in  the  black,  with  the  3Q  cumulative  operating  proﬁt/loss  going  into  the  black  (6  million  yen).  With  expanding  results  in  4Q  also,  we  plan  to  bring  the  full-‐‑‒year  operating  proﬁt/loss  into  the  black.

Projection  image  in  4Q  sales

Sales  (million  yen)

1,500

Operating  proﬁt  (million  yen)

1,500	
  
1,159	
  

1,615	
  300

Projection  image  in  4Q  consolidated  operating  proﬁt

1,000

70	
  

500

100

44	
  

0

0

6	
  

-­‐38	
  -‐‑‒100△	
  109	
  
1Q

200

Sales
Quarterly  operating  proﬁt

2Q

3Q

4Q

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Cumulative  operating  proﬁt

10	Smartphone  Media  Business

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

11	Smartphone  Media  Business

The  smartphone  media  business  comprises  the  following  three  elements.

 　 　 　 　 　 　 　 　 　“CocoPPa”

 　 　 　 　 　 　 　 　 　 　 　The  Smartphone  Decoration  Community  App 　 　 　 　 　 　 　 　 　 　 　Reached  18  million  downloads(*) 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　*  As  of    December  15,  2013 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　  20  million  downloads  were  reached  on  January  26,  2014.

“Apps  for  the  Career  Market”“Aﬃliate  Media”

8  in-‐‑‒house  apps  provided  for  the  au  Smart  Pass

In-‐‑‒house  operated  point  media

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

12	

“CocoPPa”  Downloads  and  Global  Popularity
Downloads  of  “CocoPPa”  reached  18  million  on  December  15,  2013.(*)
36%  of  all  downloads  is  from  U.S.  and  it  has  grown  to  be  a  global  community  with  83%  of  all  users  overseas.

Monthly  cumulative  downloads  of  “CocoPPa”

Breakdown  of  cumulative  “CocoPPa”  downloads  by  country*For  details,  refer  to  the  press  release  dated  December  18,  2013  20  million  downloads  were  reached  on  January  26,  2014.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

13	

“CocoPPa”  3Q  Programs
As  planned,  “sales  of  premium  content”  and  “tie-‐‑‒up  advertising”  have  launched.  We  also  newly  started  “CocoPPa  for  Sugotoku.”<Programs  started  in  3Q  as  planned  (from  2Q  Results)>
Premium  Content  (Since  November）
In  addition  to  the  Sanriowave  characters  already  announced,  to  be  delivered  roughly  100  home  screen  themess  (icons  +  wallpaper).

￥

100

￥

contents

Android  version  launched  on  November  13,  iOS  version  on  November  20

Tie-‐‑‒Up  Advertisements  (to  be  launched  in  3Q)Get  ad  revenue  from  the  sponsor.  
The  corporate  characterʼ’s  icons  &  wallpaper  will  be  delivered.

FREE!

￥

<New  programs  started  in  3Q>
“CocoPPa  for  Sugotoku”

Provide  CocoPPa  for  the  “Sugotoku  Content®”  provided  by  NTT  DoCoMo,  Inc.

￥

Advertisements  were  launched  on  November  11;  3  campaigns  were  already  held  in  3Q

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Launched  at  December  17

14	

“CocoPPa”  Premium  Content  Sales  Progress
Sales  launched  in  3Q.  This  is  a  trial-‐‑‒and-‐‑‒error  phase  intended  to  contribute  to    future  mid-‐‑‒  to  long-‐‑‒term  revenues.
Events  in  3Q

Opened  the  “CocoPPa  Store” 　(Android  launch  11/13,  iOS  launch  11/20)

Diversiﬁcation  of  homescreen  themes

Initially  35  themes  →  50  themess  by  the  end  of  Dec.    (to  be  expanded  further  in  the  future)  Introduced  limited-‐‑‒edition  seasonal  sets  (a  Sanrio  winter  version,  etc.)

What  we  will  do  in  4Q  and  thereafter

Boost  AwarenessImprove  leads  within  CocoPPa  and  announcements

Make  Store  More  Attractive

Sell  decoration  sets  with  additional  characters  and  celebrities,  etc.

Continuous  improvements  to  make  it  the  mid-‐‑‒  to  long-‐‑‒term  revenue  opportunities
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

15	

“CocoPPa”  Premium  Content
Sales  of  cartoon  character  home  screen  themes  (sets  of  icons  and  wallpaper)  as  premium  content
Samples  of  premium  content  and  home  screens
Hello  Kitty  version

Snoopy  version<Flow  of  purchase  > 　(As  of  December  31,  2013)

１

Purchase  the  points  for  CocoPPa
Points  can  be  purchased  from  100  point  increments  at  a  cost  of  100  points  =  ¥100
• In  the  Android  version,  there  are  also  monthly  subscription  plans  where  points  can  be  purchased  at  a  discount 　 　 　 　¥330  plan  →  330  points  +30  bonus  points 　 　 　 　¥500  plan  →  500  points  +60  bonus  points 　 　 　 　¥1,000  plan  →1,000  points  +150  bonus  points•

２ Points  to  be  used  to  download  home  screen  themes••（C)1976,2014  SANRIO  CO.,LTD.  
APPROVAL  NO.E-‐‑‒540128-‐‑‒1•

8  icons  +  2  wallpapers  costs  200  points
16  icons  +  2  wallpapers  costs  300  points(excluding  the  sale  and  limited  items)(c)  2013  Peanuts  Worldwide  LLC

As  of  the  end  of  December  2013,  sales  of  approximately  50  diﬀerent  decoration  sets  have  started.  We  have  ﬁnished  contracting  for  more  than  100  sets,  and  these  will  be  successively  introduced  into  the  lineup.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

16	Diversiﬁcation  of  “CocoPPa”  Revenue  Opportunities
With  the  newly  added  revenue  opportunities(premium  content,  tie-‐‑‒up  advertising,  CocoPPa  for  Sugotoku)  in  3Q.  It  is  expected  the  higher  growth  in  the  futures.
<Changes  in  “CocoPPa”  Revenue  Opportunities>
Focus  on  the  new  monetization  from  3Q
CocoPPa  Play(See  p.18.)

Shifting  to  the  new  monetization
CocoPPa  forSugotoku
Tie-‐‑‒up  advertising
Premium  content
Banner  ads

3Q (*)

CocoPPa  forSugotoku

Tie-‐‑‒up  advertising

Premium  content
Banner  ads

4Q  and  after (*)* 　The  above  graph  is  an  image  of  revenue  source  change,  and  does  not  represent  actual  sales  ﬁgures  or  plans
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

17	

“CocoPPa”  4Q  and  After  Initiatives
As  a  joint  business  with  G-‐‑‒Crest,  Inc.,  we  plan  to  release  an  avatar(*)  app  called  “CocoPPa  Play”  (for  iOS  in  late  February  and  for  Android  in  late  March).  In  advance  of  the  release,  we  started  taking  preorders  on  January  14,  2014.

CocoPPa  PlayCocoPPa• Released  as  a  separate  app  from  “CocoPPa.”• Users  are  able  to  dress  up  their  avatars  with  cute  clothes  and  accessories,  and  engage  in  play  such  as  communicating  with  other  users,  and  show  them  oﬀ  in  fashion  shows  and  other  events.
• The  main  revenue  source  is  paid  items  such  as  clothes  for  dressing  avatars.

Tie-‐‑‒ins  to  be  able  to  set  avatars  created  in  ”CocoPPa  Play”  on  the  “CocoPPa”  mypage.

*  An  avatar  is  a  character  serving  as  a  userʼ’s  own  features  on  the  Internet.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

18	  Policy  of  UNITEDʼ’s  Smartphone  Media  Business
It  is  aimed  to  scale  up  the  mid-‐‑‒term  proﬁts  by  producing  the  investment  cycles  from  the  short-‐‑‒term  apps  to  the  mid-‐‑‒terms  monetization  apps.
Goal

Strength

Short-‐‑‒term
monetization  apps

To  earn  the  stabilized  proﬁts  with  the  early  start-‐‑‒up  of  services

・Speed  of  development
・Marketing  know-‐‑‒how  in  ad  businessLong-‐‑‒term  monetization  apps

To  scale  up  the  proﬁt  by  creating  the  huge  traﬃcs  with  the  services  closely  to  lifestyle

・The  experience  of  operation  in  the  gigantic  media  “CocoPPa”  with  more  than  20  million  download
・The  know-‐‑‒how  of  development  in  lifestyle  apps

The  images  of  proﬁt  structure  in  Smartphone  business
size

Short-‐‑‒term  monetization  apps

Investment
termsLong-‐‑‒term  monetization  apps
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

19	

UNITEDʼ’s  Smartphone  Media  BusinessStartup  of  the  app  business,  we  have  planned,  developed  and  operated  67  diﬀerent  varieties  of  apps.
＜Long-‐‑‒term  monetization  apps＞＜Short-‐‑‒term  monetization  apps＞

CocoPPa  (July  2012~∼)

Apps  for  the  career  market  (February  2012~∼)Smartphone  decoration  community  appiam  (January  2014~∼)

Proﬁle  exchange  service  developed  by  subsidiary  Fogg

We  supply  8  apps  for  the  au  Smart  Pass.  Several  apps  to  be  delivered  in  4Q.
Mentality

Magic  Mental  Arithmetic!!

Test

Recipe  Secret  Techniques

Simple  Snack  Recipes・Sugotoku  Contents®(December  2013〜～) 　CocoPPa  and  other  several  apps  to  be  delivered.

CocoPPa  Play  (February  2014~∼)
Avatar  app  linked  to  CocoPPa

Aﬃliate  media  (March  2012~∼)

We  operate  several  in-‐‑‒house  developed  aﬃliate  media  services.

Investment  in  a  Promising  App  Business  Company

Mercari  (July  2013~∼)

We  have  planned  and  developed  67  paid  and  free  apps  to  date.

We  invested  in  Mercari,  Inc.  which  operates  the  ﬂea  market  app  “mercari”  (investment  was  in  August  2013).
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

20	

RTB  Advertising  Business

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

21	

RTB  Advertising  Market  Size  and  Predicted  Share  of  Overall  Display  Advertising

The  U.S.  RTB  advertising  market  is  projected  to  expand  to  approximately  $8.9  billion  in  FY  2016,  while  the  Japanese  RTB  advertising  market  is  projected  to  expand  to  approximately  $1.1  billion  in  FY  2016.  This  is  projected  to  be  the  highest  growth  rate  within  the  display  advertising  market.
Forecast  of  U.S.  RTB  advertising  market  size

(million  US  dollars)

10,0009,000
8,000

In  the  U.S.,  RTB  companies  CRITEO  S.A.  and  Rocket  Fuel  Inc.  were  listed  on  the  NASDAQ  in  2013  (see  page  
39).

6,883

7,000
6,000

2,000
1,000
0

6%
2012

35%

1,200

20%

13%

2013

1,400

15%

2,183
8%

40%

25%

3,556

4,000

(million  US  dollars)

30%

5,100

5,000

3,000

8,884

16%

11%

2014

2015

2016

Forecast  of  Japanese  RTB  advertising  market  size

10%

40%

1,147

1,000

5%

200

0%

0

25%

612

600
400

30%

880

800

35%

20%
15%

351

10%

201

8%

2%

4%

6%

2012

2013

2014

2015

10%

2016

5%
0%

Size  of  RTB  advertising  market

Size  of  RTB  advertising  market

RTB  advertising  share  of  overall  internet  ad  market

RTB  advertising  share  of  overall  internet  ad  market(Source:  IDC  October  2012  /  RTB  advertising  share  of  overall  market  calculated  by  United)
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

22	

RTB  Advertising  Market  Overview
The  average  growth  rate  of  the  Japanese  RTB  advertising  market  over  2012-‐‑‒2016  is  projected  to  exceed  that  of  the  U.S.
・U.S.  42%  <  Japan  55%U.S.  RTB  advertising  market  size  and  growth  rate
(million  USD)

10,0009,000

Annual  average  growth  42％

8,000

6,000

2,000

200

2012

612
351

400

2,183

2013

2014

2015

2016

0

1,147

880

600

1,000
0

Average  annual  growth  55％

800

3,556

4,000

1,400

1,000

5,100

5,000

(million  USD)

1,200

6,883

7,000

3,000

8,884

Japanese  RTB  advertising  market  size  and  growth  rate

201

2012

2013

2014

2015

2016

(Source:  IDC  October  2012)
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

23	

Japanese  RTB  Advertising  Market  and  Unitedʼ’s  Growth  Rate
With  increased  revenues  mainly  from  smartphones,  United  has  exceeded  the  predicted  average  growth  rate  in  the  Japanese  domestic  market.
・ Japanese  RTB  advertising  market  growth  rate  75％  <  in-‐‑‒house  advertising  platform  growth  rate  176％

Japanese  RTB  advertising  market  size  and  growth  rate

(million  US  dollars)

400
350
300
250
200

Growth  rate  of  in-‐‑‒house  advertising  platform  sales

351

75%  
increase

176%  
increase

201

150
100
50
0

2012

Source:  IDC,  October  20122013

April-‐‑‒December
2012

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

April-‐‑‒December
2013

24	

Factors  Behind  Higher  Growth  in  Smartphone  Devices
Although  PC  site  visitor  numbers  are  decreasing,  the  smartphone  application  user  numbers  and  traﬃc  are  both  in  increasing  trends.

l The  number  of  average  monthly  visitors  to  PC  sites  in  2013  decreased  by  9％  year-‐‑‒on-‐‑‒year.

 　(Year-‐‑‒on-‐‑‒year  comparison  of  total  for  top  10  sites 　*1)
l The  number  of  monthly  users  of  smartphone  apps  has,  in  the  most  recent  half-‐‑‒year,  increased  by  19％      (April-‐‑‒December  2013  comparison  of  total  for  top  10  apps 　*1)
l Mobile  data  traﬃc  in  Japan  has  roughly  tripled  Year  on  Year  ( )*2

*1:  Nielsen  Japan  survey 　December  2013

*2:  Cisco  Visual  Networking  Index:  Global  Mobile  Data  Traﬃc  Forecast  Update,  2012–2017 　February  2013

As  an  “Platform  specialized  to  mobile  RTB  ads”  we  intend  to  continue  growth  mainly  in  the  smartphone  RTB  segment.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

25	

Situation  of  the  In-‐‑‒House  Advertising  Platform
By  making  an  early  advance  investment  to  on  smartphone  RTB  advertising  inventory,  our  in-‐‑‒house  advertising  platform  has  grown  to  be  the  largest  domestic  service  in  smartphone  RTB  advertising.

•In-‐‑‒House  DSP  ”Bypass”••

In-‐‑‒House  SSP  “AdStir”•

Number  of  advertisers  broke  the  1,500  company  markLargest  number  of  integrated  partner  SSPs(*1)

The  number  of  ad  requests  increased  to  41.3  billion,  or  1.5  times  those  in  the  previous  quarter.
The  current  advertisement  inventory  in  smartphone  RTB    is  the  largest  among  domestic  SSPs(*2)*1  In-‐‑‒house  survey.  Connected  to  7  SSPs  as  of  the  end  of  December  2013.
*2  In-‐‑‒house  survey.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

26	

Partner  SSP  of  our  in-‐‑‒house  DSPOur  in-‐‑‒house  DSP  “Bypass”  is  connected  to  the  most  SSPs  of  any  domestic  service<SSP  Connections  of  “Bypass”>

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

27	

Growth  in  Advertising  Inventory  of  In-‐‑‒House  SSPThe  current  advertising  inventory  (*)  of  the  in-‐‑‒house  SSP  “AdStir”  was,  through  continuous  media  recruiting,  raised  to  1.5  times  that  in  the  previous  quarter.

“AdStir”  current  advertising  inventory  (by  quarter)(Ad  views:  units  of  100  million)

500	
  

413	
  

400	
  
277	
  

300	
  
200	
  

124	
  

179	
  

100	
  
0	
  
2012	
  	
  4Q	
  

2013	
  	
  1Q	
  

2013	
  	
  2Q	
  

2013 3Q	
  * 　Current  advertising  inventory:  total  number  of  ad  views  on  media  with  “AdStir”  installed.

 　This  indicates  the  size  of  the  inventory  that  “AdStir”  can  serve  upon  receiving  bids  from  DSPs.	

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

28	

Summary  of  our  RTB  Advertising  Business
Our  RTB  advertising  business  is  growing  faster  than  the  market  projections,  mainly  in  smartphone  RTB  advertising.  The  future  RTB  advertising  market  is  projected  to  show  a  trend  where  smartphones  outpace  the  PC  growth  rate.

External  Factors

Internal  Factors• Growth  rate  of  domestic  RTB  advertising  market  over  2012-‐‑‒2016  projected  to  be  an  average  of  55%.
Higher  growth  than  display  advertising  overall• Growth  in  smartphone  traﬃc• Increase  in  sales  in  our  RTB  advertising  business  exceeding  the  year-‐‑‒on-‐‑‒year  growth  rate  predicted  for  the  RTB  advertising  market• Having  the  largest  domestic  advertising  inventory  in  smartphone  RTB  advertising,  and  continuing  to  expand• A  wealth  of  knowhow  in  smartphone  RTB  advertising

Solidify  position  as  number  one  in  smartphone  RTB  advertising

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

29	

About  ﬁnancing
The  Moving  Strike  Warrants  intended  allottee  for  Merrill  Lynch  Japan  Securities  Co.,  Ltd.  has  exercised  to  69%.（raised  1.46  billion  yen）
▶Raised  funds  will  be  used  within  about  6  years  at  appropriate  timing.
Exercising  Moving  Strike  Warrants
The  number  of  grant  stock  at  February  3,  2014
(Total)550,000

The  number  of  used  subscription  warrants(The  use  ratio  for  the  publication  total  number  of  the  subscription  warrant)

5,500（69.62％）

The  amount  of  funds  at  February  3,  2014

1,468  million  yen

Number  of  Warrants  which  have  not  been  exercised  at  February  3,  2014

2,400

*  For  more  information,  please  see  our  homepage  (http://united.jp/ir/ir-‐‑‒release/)

Utilization  policy  of  funds  being  raised• Planned  payment  period  ：Between  2014  and  2020
• Invested  funds  for  growth  of  our  ﬁrst  priority  smartphone  media  and  RTB  advertising• Equity  participation  and  M&A  costs  in  smartphone  media  and  RTB  businesses  or  new  Internet-‐‑‒related  businesses
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

30	

Overall  Summary• 3Q  cumulative  operating  proﬁt  has  turned  around  ahead  of  schedule.  We  planed  it  in  4Q.

• In  the  smartphone  media  business,  we  continued  measures  to  diversify  “CocoPPa”  revenue  sources  in  3Q,  aiming  for  medium-‐‑‒term  growth.

• In  the  RTB  advertising  business,  growth  continued  to  outpace  the  growth  of  the  overall  RTB  advertising  market.  Our  in-‐‑‒house  platforms  were  the  drivers  of  growth.

Smartphone  Media  Business

RTB  Advertising  Business

4Q  Key  Policy:  Diversify  “CocoPPa”  revenue  sources,  and  continue  growth  trends  by  contribution  to  revenue  of  in-‐‑‒house  smartphone  apps  in  addition  to  “CocoPPa”

4Q  Key  Policy:  Get  increased  sales  in  advertising  peak  periods,  and  secure  domestic  number  one  position  of  smartphone  RTB  advertising  platform

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

31	

2 　Reference  Material

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

32	

3Q  (October-‐‑‒December)  Consolidated  P/L  Statement  (Year-‐‑‒on-‐‑‒Year)
With  growth  in  the  smartphone  business  in  the  media  segment,  the  company-‐‑‒wide  quarterly  operating  proﬁt  went  into  the  black.
(million  yen)
3Q  of  FY  ending  March  2014

Sales

3Q  of  FY  ending  March  2013

Year-‐‑‒on-‐‑‒Year  Change  (%)

1,615	

931	

+73%	

 　Media  segment

837	

8	

+10,340%	

 　Advertising  segment

749	

631	

+19%	

 　Investment  segment

40	

291	

△86%	

 　Inter-‐‑‒segment  elimination

△12	

0	

-	

Total  proﬁt  from  sales

432	

301	

+43%	

 　Media  segment

253	

7	

+3,517%	

 　Advertising  segment

143	

74	

+93%	

 　Investment  segment

35	

220	

△84%	

Operating  proﬁt

44	

△58	

-	

 　Media  segment

61	

△23	

-	

 　Advertising  segment

△2	

△84	

-	

 　Investment  segment

28	

133	

△79%	

 　Head  oﬃce  expenses

△41	

△84	

-	

Recurring  proﬁt

43	

35	

+29%	

Quarterly  net  proﬁt

24	

44	

△25%	

・ The  numbers  for  2Q  of  FY  ending  March  2013  are  the  proﬁt/losses  of  MotionBeat  Inc.  prior  to  the  merger  and  do  not  include  the  proﬁt/losses  of  SPiRE  Inc.  

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

33	

Consolidated  Balance  Sheet  for  this  Quarter
Cash  on  hand  increased  by  372  million  yen  due  to  the  return  of  entrusted  moneys  for  treasury  stock  acquisition  and  the  exercise  of  warrants  with  exercise  price  revision  terms,  etc.  Fixed  asserts  increased  by  102  million  yen  due  to  investments  in  Wonderplanet  Inc.  and  other  factors.
(million  yen)End  of  This  Quarter(Dec.  2013)End  of  Previous  Quarter(Sept.  2013)

Increase/  Decrease

Current  assets

5,566

5,508

+58

(Cash  on  hand)(3,681)(3,309)(+372)

Fixed  assets

942

840

+102

Current  liabilities

979

1,044

△65

Fixed  liabilities

0

0

0

5,529

5,304

+225

Net  assets

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

34	

Outline  of  the  “CocoPPa”  Service
Icons,  wallpapers  and  home  screens  posted  by  users  are  downloaded  and  shared  in  the  community.  The  translation  featured  by  Google  within  “CocoPPa”  is  enjoyed  by  users  for  cross-‐‑‒border  communication.

≪”CocoPPa”  Usage  Images≫
User  posting  material  (creator)

Sample  page  of  creators  (comments)”This  icon  is  cute.”  or  “I  like  your  sense  of  style.”*In  English,  Chinese,  Arabic,  German  and  many  other  languages

Icons  and  wallpaper  are  contributed  from  around  the  world  (free).380,000  icons,  90,000  wallpapers  by  the  end  of  December

Post

Exchanges  between  users  (motivation  for  creators  to  post)

Decorating  users

Smartphone  screen  decorated  using  posted  material  (free)

replies:“Thank  you  for  the  comments.”  “I  am  glad  to  contribute  it.”
*The  translation  features  are  many  of  the  languages.
There  is  ample  communication  among  users  based  on  posted  materials,  etc.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

35	Diversiﬁcation  of  “CocoPPa”  Revenue  Opportunitiess:  Time  LineUp  until  2Q,  banner  advertising  was  the  only  revenue  source.  In  3Q,  we  released  “tie-‐‑‒up  advertising,”  “premium  content”  and  “CocoPPa  for  Sugotoku”  as  new  revenue  opportunities.  In  4Q,  we  also  plan  to  release  the  avatar  app  “CocoPPa  Play”  (see  the  next  page  for  details).
Diversiﬁcation  of  “CocoPPa”  Revenue  Sources
2Q  and  before

3Q

4Qand  after

Banner  advertising

Tie-‐‑‒up  advertising

Premium  content

CocoPPa  for  Sugotoku 　CocoPPa  Play

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

36	

About  new  app  “iam”
As  the  1st  case  of  “U-‐‑‒start”,  Fogg  corp  which  has  established  at  May  2013  has  released  the  β  version  of  new  app  “iam”  at  5th  October  and  the  oﬃcial  version  was  released  at  23rd  January,  2014“iam  Usage  Images”
By  exchanging  a  single  card  with  friends  or  acquaintances,  all  information  can  be  shared.
The  information  to  be  exchanged  can  be  selected  as  follows.

Exchange  with  Mr.  A   　→  Facebook/E-‐‑‒mail/Phone
In  addition  to  pictures,  phone  numbers  and  users  can  register  information  on  multiple  social  networking  services  as  proﬁle  cards  within  the  “iam”  app.

With  Friend  B  →  twitter/LINE/Phone* 　As  an  organizational  program  for  creating  promising  new  businesses,  we  will  introduce  a  system  that  gives   　  experienced  United  employees  the  right  to  make  investments  and  start  up  new  business  companies  starting  from     　this  April.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

37	

Real-‐‑‒Time  Bidding  Setup
STEP  1

When  a  user  visits  a  site,  user  data  is  transmitted  to  a  DSP(*1)

SSP
User  Avisits  site

STEP  2

Data  on  User  A(Cookie-‐‑‒based  site  view  information,  etc.)

User  A

Advertiser:  Beverage  manufacturer

DSP
B

Advertiser:  Car  Company

DSP
C

Advertiser:  Real  Estate  Agent

Advertisers  bid  from  a  DSP,  auction  held  at  SSP(*2)▶Advertising  from  the  winning  advertiser  is  displayed.
Auctionis  served  a  real  estate  advertisement

DSP
A

SSP
Advertising  from  winning  advertiser  is  servedAdvertiser  bid  data

DSP
A
DSP
B
DSP
C

Bids

¥0.05
for  User  A

Beverage  mnufacturer
Bids

Car  Company¥0.07
for  User  A

WINReal  Estate  Agent

Bids

¥0.09
for  User  A*1 DSP  (Demand  Side  Platform):  System  for  optimizing  advertising  buys  by  the  advertiser  (ad  buyer)*2 SSP  (Supply  Side  Platform):  System  for  optimizing  media  advertising  revenue
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

38	

Information  in  the  stock  listing  and  recent  business  results  of  CRIREO  S.A.  and  Rocket  Fuel  Inc.

CRITEO  S.A.

Rocket  Fuel  Inc.

Listed  market：Ticker  symbol

NASDAQ：CRTO

NASDAQ：FUEL

Listing  date

October  30,  2013

September  20,  2013Market  capitalization（billion  US  dollars）
・Closing  price  in  the  listing  day

1.9

1.8

・December  31,  2013

1.8

2.0

（million  euros）（million  US  dollars） 　Sales271.8

  106.5 　Income  from  operations      8.9

    △7.7 　Net  income(loss)      0.9

△10.3

Number  of  full-‐‑‒time  employees

700

552

Results  for  the  ﬁscal  year  ended  December  2012

Reference：1 　Exchange  rate：1US$＝¥102、1€＝¥139 　(January  29,  2014) 　 　 　   　     　2 　Sales  prediction  for  the  ﬁscal  year  ended  December  2013  of  Rocket  Fuel  Inc.  is  232.8  million  US  dollar.  
                                          （Source：Bloomberg） 　 　

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

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VisionBecome  the  leading  internet  ﬁrm  in  Japan

MissionCreate  new  value  through  continued  challenges  and  contribute  to  society

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

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