May 11, 2015

Full Year, Fiscal Year Ending March2015
Consolidated Financial Results

United, Inc.
(TSE Mothers, Code 2497)

All of the opinions, predictions, forecasts and the like presented in this document arethose 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 thisinformation. Actual results may differ greatly from these forecasts due to changes invarious factors. Company names and product names presented in this document aretrademarks or registered trademarks of their respective owners.

Contents

1. Financial Highlights

P3

2. Business Results Forecast for YearEnding in March 2016

P9

1. Status of Smartphone Application
Business and Future Direction

P13

1. Status of RTB Ad-Tech Businessand Future Direction

P23

2. Summary

P29

3. Reference Material

P31

Copyright © UNITED, Inc. All Rights Reserved.

1

Our Core BusinessWe are putting effort into the RTB advertising business andsmartphone media business expecting to see market growth in the
future, actively investing in these two to achieve business growth.

Media segment

Smartphone media businessCore Businesses

Other media businesses(*1)

Advertisingsegment

RTB advertising business(*2)

Investment segment

Venture capital business

Advertising agency business*1 Email advertising, internet research, sports marketing*2 RTB (real-time bidding) refers to which ad inventory is bought and sold on a per-impression basis,
via programmatic instantaneous auction
Copyright © UNITED, Inc. All Rights Reserved.

2

1. Financial Highlights

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3

Highlights of Full-year Financial Results

Whole• Both revenue and profit increased compared to the same
period last year (Growth rate compared to the same period a year ago)
Full-year
Consolidated
Results

Sales
8,333 million yen
Operating profit
370 million yen
Net profit
551 million yen(+35%)(+167%)(+444%)

・Core businesses (smart phone media business + RTB advertising business)
continue to act as drivers for growth.

Core Businesses• Sales: +37% compared to the same period last year
Smartphone
Media Business• CocoPPa-related services, primarily avatar app “CocoPPa Play” led the growth.
• Idol cheering application “CHEERZ” was released (December 2014).

RTB Advertising
Business• Sales: +90% compared to the same period last year
• SSP “AdStir” led the growth throughout the year. DSP “Bypass” achieved
growth in 4Q.

Copyright © UNITED, Inc. All Rights Reserved.

4

Consolidated P/L Statement for Full Fiscal Year
Both revenue (+35%) and Operating profit (+167%) grew compared to the same period last year
Driven by the expansion of advertising segment resulting from the growth of RTB advertising business(million yen)

Results of the same period
last year (year ending inMarch 2014)

Increase/decrease ratecompared to the same
period last year

8,330

6,156

＋35%

3,357
4,918
149
△93

3,001
3,050
162
△58

＋12%
＋61%
△8%
-

2,113

1,697

＋24%

983
1,001
128
0

962
625
110
0

＋2%
＋60%
＋16%
-

1,742

1,558

＋12%

370

138

＋167%

268
548
102
△548

399
167
80
△508

△33％
＋227％
＋27％
-

626

153

＋308%

253

20

＋1,118%

1

△5

-

551

101

＋444%

△79

△12

-

4

△39

-

Year ending inMarch 2015
Sales
Media segment
Advertising segment
Investment segment
Inter-segment elimination
Total profit from sales
Media segment
Advertising segment
Investment segment
Inter-segment elimination
Selling, general and administrative
expenses
Operating profit
Media segment
Advertising segment

Investment segment
Profit from investment fundto which equity method isapplicable:
213 million yen (3Q)
Profit from stock sales dueto the listing of Datasection,
Inc.: 380 million yen (3Q)
Loss from sale ofinvestment securities of SS
Digital Media,
LLC: 413 million (4Q)

Headquarter expense
Current profit
Equity in earning of affiliate
Other
Quarterly net profit
Extraordinary profit and loss
Tax expense** From 1Q of the year ending in March 2015, we changed the standards for allocating SG&A to each business segment
and recalculated the operating profit of the same period a year ago according to the new standards.
Copyright © UNITED, Inc. All Rights Reserved.

5

Consolidated: Changes in Sales and Operating Profit
Sales of the entire company vs. the same period last year
: +35%
Operating profit of the entire company vs. the same period last year:+167%
Sales of core businesses (smartphone media business + RTB advertising business) vs. the same period last year: +67%

Compared to the same period last year
Sales of other businesses

Sales of core businesses

Sales(million yen)

Operating profit
Operating profit(million yen)

Quarterly changes
Compared to the same period last year: Sales grew +8%, and operating
profit grew in both smartphone media business and RTB advertisingbusiness.
Operating profit
Sales(million yen)(million yen)

Year ending in Year ending inMarch 2014
March 2015
Year ending inMarch 2014

Year ending inMarch 2015
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6

Smartphone Media Business: Changes in Sales+37% compared to the same period last year
CocoPPa-related services (particularly CocoPPa Play) led the growth
Compared to the same period last year
(million yen)

Quarterly changes“CocoPPa-related services” achieved growth, while operating profit in“Affiliate media” decreased, resulting in a slight increase as a whole.
(million yen)

Slightincrease

Year ending inMarch 2014

Year ending inMarch 2015

Year endingin March 2013

Year endingin March 2014

Year endingin March 2015
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7

RTB Advertising Business: Changes in Sales+90% compared to the same period last year.
SSP led the growth throughout the year. Growth of DSP accelerated in the 2nd half of the year.
Compared to the same period last year
(million yen)

Quarterly changes+11% compared to the same quarter last year. Profit continued to
grow. DSP led the growth.
(million yen)

Year ending in Year ending inMarch 2014
March 2015

Year endingin March 2013

Year endingin March 2014

Year endingin March 2015
Copyright © UNITED, Inc. All Rights Reserved.

8

2. Business Results Forecast for YearEnding in March 2016

Copyright © UNITED, Inc. All Rights Reserved.

9Forecast of Consolidated Sales & Operating Profit for YearEnding in March 2016
Business results forecast for year ending in March 2016

・Consolidated sales: 10 to 12 billion yen (+20 to +44% vs. the same period last year)
・Consolidated operating profit: 0.8 to 1 billion yen (+116 to +170% vs. the same period last year)

Forecast of changes in consolidated sales(million yen)(million yen)

+20%

to
+44%

12,00010,000
to 12,000

10,000

1,000
+116%

8,330

800
to 1,000

to
+170%

800

8,000
6,000

Forecast of changes in consolidated operating profit

600

6,156
400

4,000

370
200

2,000

138
0

0
Year ending in Year ending in Year ending inMarch 2014
March 2015
March 2016
(forecast)Year ending in Year ending in Year ending inMarch 2014
March 2015
March 2016
(forecast)

Copyright © UNITED, Inc. All Rights Reserved.

10

Policy for Year Ending in March 2016

Whole Company• Continued growth primarily in core businesses (Smartphone application business (*1)
＋ Ad-Tech Business (*2))• Smartphone application business: Proactive investment toward a leap in the 2nd halfof the year
• Ad-Tech Business: Continued growth exceeding the market expansion pace

Smartphone Application Business (See Pages 13-22 for details)• Accelerate profit expansion by the application group led by “CocoPPa”• Reinforce investment in”CHEERZ” with successful start-up. Recover the investment in
the 2nd half of the year.
• Newly enter into “Native social game” aiming for a future large growth in profit

Ad-Tech Business (See Pages 23 to 28 for details)• Continued growth in sales and operating profit centering around our own DSP/SSP• Focus on the fields of applications which are expected to achieve a high growth insmartphone RTB market*1 The name changed from “Smartphone Media Business,” which was used until the year ending in March 2015
*2 The name changed from “RTB Advertising Business,” it was used until the year ending in March 2015. It newly
covers ad networks handled by advertising agencies and SNS advertisement.
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11

Business Results Forecast for 1Q of Year Ending in March
2016 (Operating Profit)
Reinforce investment in Smartphone Application Business

Operating Profit of -1 million yen to 0 yen is forecasted

1Q of Year Ending in March 2016 /Operating profit forecast by businessBusinesses

Operating profit
forecast• Smartphone Application
Business

Negative

Investment in CHEERZ andnative social games• Ad-Tech Business

Positive

Continued growth led by ourown DSP/SSP• Investment Business

Positive

Profit from fund management,etc.

• Other businesses

Remarks±0

Operating Profit：-1 million yen to 0 yen
Copyright © UNITED, Inc. All Rights Reserved.

12

3. Status of Smartphone Application
Business and Future Direction

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13

List of Services in Smartphone Application Business
The main services are the following 6 services.
Proactive investment in “CHEERZ,” and “Native social game” in the fiscal year ending in March 2016.

Services to be proactively invested
CHEERZ

Idol cheering application with user participation

Native social gameNew entry from 1Q of the year ending in March
2016

Services producing stable profit
CocoPPa-related
Services

Continued profit expansion by the application group led by “CocoPPa”
achieving 38 million downloads and avatar application “CocoPPa Play”

Casual gameapplication

Casual game application is provided for free, while producing
profit through advertisement displayed on screen

Affiliate media

Point-earning media developed and operated byUnitedApplication for
carrier market

Our application is provided to NTT Docomo “SugotokuContents®” and au “Smart Pass,” etc.
Copyright © UNITED, Inc. All Rights Reserved.

14

CocoPPa-related Services Customization Community App ”CocoPPa” Download

Achieved 38 million downloads in April 2015. The ratio of downloads by Android rose to47%.

Changes in cumulative downloads by OS

Percentages of downloads by country

3,800(Unit: 10,000 DL)

United States
26%

Other 23%

iOS (released in July 2012)
Android (released in May 2013)

タイ 2%
Thailand 2%
Turkey 2%
Canada 2%
China 3%Cumulative
38 mil.
downloads

Spain 3%

Japan 13%

Italy 3%
United Kingdom 3%
Taiwan 3%

Brazil 6%

France 4%
2012
Jul.

Oct.

2013
Jan.

Apr.

Jul.

Oct.

2014
Jan.

Apr.

Jul.

Oct.

2015
Jan.

Apr. 5

Mexico 4%

Germany 4%

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15

CocoPPa-related Services

Changes in Sales+231% Compared to the stage before monetization method diversification (2Q in year ending in March 2014)
Continued growth with new efforts. Following 3Q, ”CocoPPa Play” also led the growth in 4Q
Quarterly changes in sales of “CocoPPa-related services”（When 2Q of the year ending March 2014 is considered as “100”）
Collaboration app
release(From Jan.)
CocoPPa Home
official release(from Dec.)+231%

Sales only frombanneradvertisement(beforediversification)

Introduction of newrevenue-earning
approaches• Charging contents• Tie-up advertisement• Supply to SugotokuContents®

Year ending in March 2014

CocoPPa Play
official release(from Aug.)Aim for further
growth in 1Q onward+23%

Year ending in March 2015
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16

CocoPPa-related Services Future Plan

Aim to grow the entire services through various applications and profit-producing measures“CocoPPa Home”
Flow of customers
Advertising
Revenue
Revenuefrom charging
New“Collaboration apps

「CocoPPa Play」

Battery saving

Revenue fromcharging「CocoPPa」

Advertising
revenue
Revenue fromcharging

Advertising
revenue

Packet data checker

Convenient mirror

Launched in January 2015.
Daily-use apps of mirror and packet data checker
were released in collaboration with popular illustrator“Kanahei (*1)”
Advertising revenue is obtained with a high active
user rate.
Future plan
・New Kanahei series apps
・Collaboration with other contents
・Overseas expansion*1 Illustrator/cartoonist living in Ehime Prefecture, Japan, who is popularamong females for her cute and comforting illustrations. She debuted as ahigh-school student in “Seventeen,” a Japanese magazine published by
Shueisha, and has over 2 million followers worldwide in CocoPPa

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17

CHEERZ

Idol Cheering App “CHEERZ”

Successful start-up from release in December 2014

Strengths of “CHEERZ”

Idols can participate
with ease

User friendly

Overseas expansion

Recent topics

Idols just need to upload their selfie photos, anddo not need to respond to their fans. They canparticipate frequently not restricted by time andplace.

Number of participating idols
At the time of release (Dec. 3, 2014):
approx. 200 idols
As of Mar. 31, 2015:
approx. 300 idols

Also, cheer by fans is not restricted by timeand place.
Fans ranked high in the fan ranking will be
rewarded, such as invitation to real events.

Idol’s photo will be presented to users ranked
high in the fan ranking.
Sale of a visual book ”CHEERZ Book” withphotos of high-ranked idols

Visual services requiring no text, which can be
expanded easily transcending language barrier

Scheduled to participate in Japan Fes. to beheld in Thailand, France, and the U.S. in May
through August

Successful start-up by utilizing its unique strengths

The idol market expanded to 86.3 billion yen in FY 2013 (+19.9% vs. the same period last year) (*1)
Aim for further growth*1 Source: October 2014 survey by Nielsen
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18

CHEERZ Comprehensive Business alliance with@JAM
Comprehensive business alliance with @JAM EXPO 2015, a largest idol event in Japan held by
ZEPP Live, Co. Ltd., for promotional purpose@JAM EXPO 2015
• The largest idol event in Japan, held by ZEPP Live,a subsidiary of Sony Music Entertainment Co. Ltd.
• ZEPP Live has promoted various J-pop culture
events under @JAM branding in Japan, and is
expanding its business globally, producing idol
events named “KAWAII POP FES” in Hong Kong
and Taiwan. (The festival will be held in Shanghai
during 2015)

Major Actions@JAM EXPO 2015
• Cooperates with CHEERZ to promote “@JAM
EXPO 2015,” appealing to cell phone users• Provides “@JAM” promotional information to
CHEERZCHEERZ• Establishes special sites of “@JAM EXPO2015” in CHEERZ application, providing
the latest event news of the JAM EXPO
• Will have “@JAM EXPO 2015” known at
global events to which CHEERZ attends

Aim for growth of both services and for global development andexpansion of idol markets, making each service well known and full ofvarious contents
Copyright © UNITED, Inc. All Rights Reserved.

19

Entry into “Native Social Game”

1．Acquisition of hippos lab Co., Ltd.

• United acquired Hippos Lab, a game developer mainly focusing on social games, and madeit United’s subsidiary on May 1, 2015, by investing 112 million yen for this transaction.
• United and Hippos Lab plan to release their first native social game in summer 2015.

Name ： hippos lab Co., Ltd.
URL
：http://www.hipposlab.co.jp
Rep.
：CEO/President Nachi Goodings
He has engaged in development andpractical operation of many games in a
major game development company,
subsequently established hippos lab Co.,
Ltd. In 2011 and became its CEO, with an
aim to create original contents with highquality mainly for smart phones. He has
broad experience and knowledge about
game business generally, from social
games to consumer games.
Employees：13 members••

Was in charge of development andoperation of “Legend of sacred sword –CIRCLE of MANA,” provided by Square Enix

© SQUARE ENIX CO., LTD. All Rights Reserved.
Developed by hippos lab Co., Ltd.

United acquired human resource and know-how of development
and business operation about social native games
First title will be released in summer 2015
Copyright © UNITED, Inc. All Rights Reserved.

20

Entry into “Native Social Game”

2. Joint Business with Wonderplanet

Native social game “Crush Fever” will be released in June 2015 as a joint business with Wonderplanet,Inc., our invested company.

100 million yen
invested in October
2013
Wonderplanet, Inc.
・ A game development company basedin Nagoya・ Received investment from “LINE GAME
Global Gateway” as the first project toreceive project financing.

Native social game “Crush Fever” will be released
as a joint business in June 2015
Collaboration Scheme
Development: Wonderplanet(United pays for part of development cost)
Promotion & operation:
Jointly performed by two companies

What we gain
Profit throughrevenue sharing

Promotion & operation
know-how
Copyright © UNITED, Inc. All Rights Reserved.

21

Portfolio of Services in Smartphone App Business
Proactively invest in “CHEERZ,” and “Native social game” in the year ending in March 2016.
Other services also make stable contribution to profit

Revenue fromchargingNewCHEERZ

Apps forcarriermarketNativegame

Services to be
Proactively
invested in Fiscal YearEnding inMarch 2016

CocoPPa-related
services
CocoPPa
Play
Investment scale
per app(Small)Casual gameapps

CocoPPa

CocoPPa
Home

Investment scale
per app(Large)New

Collaboration
App

Affiliate
media
Advertising
revenueNew  New services released in 4Q of year ending in March 2015 onward
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22

4. Status of RTB Ad-Tech Businessand Future Direction

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23

RTB Advertising Business: Quarterly Changes in Sales
Continuous profit growth for 7 consecutive quarters
since 1Q of year ending March 2014

Sales in RTB Advertising
Business/Quarterly changes

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24

Business Progress of Our DSP & SSP in Year Ending in March 2015
Both DSP and SSP grew in scale during the last one year
For both DSP and SSP, total sales profit rates rose with sales growth

Changes from March 31, 2014 to March 31, 2015

Our DSP ”Bypass”

Cumulative number of advertisers:
2,100 → 3,000 companies
Inventory at distribution destination:
85 billion → 165 billion imp.
Support new distribution approach:
Dynamic retargeting,
Native RTB ads

Changes from March 31, 2014 to March 31, 2015

Our SSP “adstir”

Number of connections to DSP:
7 → 18 DSPs
Media introduced with adstir:
14,000 → 22,000 media

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25

Forecast of Ad Tech Market Size
While the growth of PC display-ads is slowing down, the sales of smartphone-ads, ourmain business segment, continues to grow and is forecasted to exceed thatof PC display-ads in 2015
Presumption and Forecast of Advertisement Market for Ad Technology (by device) 2012 - 2017

(Unit: 100 million yen)
Joint survey by Ad Tech Studio and Seed Planning

2012

2013

2014

Smartphone

2015

2016

2017

Total

(Source: Joint survey by Ad Tech Studio and Seed Planning in September 2014)

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26

Policy for Year Ending in March 2016
We specialize particularly in the smartphone segment among ad tech businesses.

In the segment, we particularly plan to reinforce applications which account for a majority ofsmartphone use.
Specific actions for application reinforcement
DSP
Release of new services
specializing in application
distribution(scheduled for June, 2015)

SSP

Trading Desk

Reinforce acquisition of app
inventory
Support various ad formats forapp

Start-up a team specializing inhandling of ads within application

Market Data

Environment

The average time spent on smartphone is 1 hourand 48 minutes per day, 72% of which is spent on
the use of applications.

Due to technical restriction, smartphone RTB was
mainly based on web browsers so far

WEB browser

It is becoming possible to target within application
and between application and web browser in both
iOS and Android.

1 h 48 min.

Application

Excluding the time spent on basic function of smartphone(e.g., phone, phone directory, default camera)(Source: October 2014 Survey by Nielsen)
Copyright © UNITED, Inc. All Rights Reserved.

27

Organizational Strengths of Ad-Tech BusinessContinues to grow in the future based on the background of the strengths of organization supportingthe current high growth

Owns its own DSP, SSP,
ad agency

・ Able to speedily perform new actions within the company such as
RTB distribution of native ads, from testing to implementation
・ Able to provide feedback such as functional improvement from adifferent viewpoint

Highly-experienced
development members

・ Team mainly consists of members who have long engaged
in business since the time of ad network and are very
familiar with ad tech and our own system

Sales and operation
members from various
backgrounds

・ Collaboration among members with various net
advertisement backgrounds, such as ad agents, media
reps, and sales persons from media company sales

Copyright © UNITED, Inc. All Rights Reserved.

28

5. Summary

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29

Overall SummaryYear ending in March 2015

Both earnings and profits increased
against the same period last year

Whole

Sales: 8,330 mil. yen (+35%)
Operating profit: 370 mil. yen (+167%)(growth rate against the same period last year)

Smartphone
Application
Business

RTB
Advertisement
BusinessYear ending in March 2016

Forecast

Sales:
10,000 to 12,000 mil. yen(+20 to +44%)
Consolidated operating profit:
800 to 1,000 mil. yen (+116 to +170%)(growth rate against the same period last year)“CocoPPa related services” led thesales growth.
New services such as “CHEERZ”
were released.

Reinforce investment in the promotion
and personnel of “CHEERZ,” and“Native social game”
Aim for a large growth in profits in the
2nd term onward

Growth achieved primarily by ourown DSP/SSP in smartphonesegment

Achieve continuous growth insmartphone segment, primarily by ourown DSP/SSP.
Particularly reinforce application
segment.

Copyright © UNITED, Inc. All Rights Reserved.

30

6. Reference Material

Copyright © UNITED, Inc. All Rights Reserved.

31

Consolidated P/L Statement for 4Q (January to March)
Revenue (+23％) and Operating profit (+14%) increased compared to the same quarter last year
Revenue (+4%) and Operating profit (+144%) increased compared to the previous quarter(million yen)
4Q of year
ending in March2015

Results of the same Increase/decreas Results of the previous
Increase/decreas
quarter last year
e rate vs. thequarter
e rate vs. the(4Q of year ending insame quarter(3Q of year ending
previous quarter
March 2014)
last year
March 2015)

2,230

1,817

23%

2,139

+4%

Inter-segment elimination

855
1,358
43
△26

821
1,002
17
△24

+4%
+35%
+146%
-

886
1,251
19
△18

△4%
+9%
+124%
-

Total profit from sales

596

517

+15%

515

+16%

246
305
44
0

283
213
20
0

△13%
+43%
+117%
-

255
253
6
0

△4%
+21%
+607%
-

Selling, general andadministrative expenses
Operating profit

444

384

+16%

453

△2%

151

132

+14%

62

+144%

Media segment

Head office expenses

51
196
37
△133

91
72
13
△44

△44%
+170%
+180%
-

88
131
7
△165

△42%
+49%
+383%
-

Current profit

156

135

+15%

292

△47%

4
0

8
△6

△51%
-

229
1

△98%
△70%

△157

122

-

592

-

△398
85

△3
△9

-

359
△59

-

Sales
Media segment
Advertising segment
Investment segment

Media segment
Advertising segment
Investment segment
Inter-segment elimination

Advertising segment
Investment segment

Equity in earning of affiliate

Other

Quarterly net profit
Extraordinary profit and loss
Tax expense※* From 1Q of year ending March 2015, we changed the standards for allocating SG&A to each business segment and recalculated
the operating profit of the same quarter last year according to the new standards.
Copyright © UNITED, Inc. All Rights Reserved.

32

Consolidated Balance Sheet for this Quarter
Current Assets: +1,963 million yen due to increase in account receivable and other factors
Current liabilities: +598 million yen due to increase in account payable and other factors(million yen)

End ofThis Quarter(March 2015)

End ofPrevious Quarter(March 2014)

Increase/
Decrease

Current assets

9,203

7,239

+1,963(Cash on hand)

5,878

5,096

+782

Fixed assets

595

960

-364

Current liabilities

1,638

1,040

+598

Fixed liabilities

―

0

-0

8,160

7,159

+1,000Net assets

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33

Cash Flow Calculations for the Full FY Ending March 2015
The “cash flow from operating activities” was +513 million yen due to record income before
income taxes and other factors.
The “cash flow from investment activities” was △932 million yen due to increase in time
deposits and other factors.
The “cash flow from financial activities” was +364 million yen due to revenue from issuanceof shares by the exercise of subscription rights to shares and other factors.

(million yen)

Consolidated
cumulative full-year
periodCash flow from operating activities

512

Cash flow from investment activities△932

Cash flow from financial activities

364

Increase/decrease in cash and cash equivalents△17

Term-end balance of cash and cash equivalents

2,478

Copyright © UNITED, Inc. All Rights Reserved.

34

Overview of “CocoPPa” services
Icons, wallpapers and home screens posted by users are downloaded and used by otherusers. The translation featured by Google within “CocoPPa” is enjoyed by users for crossborder communication.

”CocoPPa” Usage Images
User posting material (creator)<Sample page of creators>(comments)

Icons and wallpapers are contributed fromaround the world (free). 1,100,000 icons,
250,000 wallpapers by the end of Mar.

Post

Communication between
users (motivation for
creators to post)

Users from all over
the world write
comments on thecreator’s page
”This icon is cute.” or“I like your sense ofstyle.”In English, Chinese,
Arabic, German andmany other languages

Decorating users
replies:“Thank you for thecomments.” “I am
glad to contribute it.”
The translation features
are provided in many
languages
Smartphone screen decorated using posted
material (free)

There is ample communication amongusers based on posted materials, etc.

Copyright © UNITED, Inc. All Rights Reserved.

35

Overview of「CHEERZ」
Our subsidiary, Fogg, inc. (*1) released in December 3.
Charging method
How to use “CHEERZ”

Charging will be required to “CHEER” more than the specified number.
Users can play for free, as there is free limited allocation of “CHEER” andrecovery by time.

Photos and movies ofidols appear on timeline.

Choose your favorite idol
(photo or movie) and“CHEER” her.

Idols will be ranked basedon the number of“CHEERS” received.

After the payment to theplatform, the balance ofthe revenue will beallocated to Fogg and idols(agencies).

Motivation for CHEER (1)“Developing idols”
Idols who ranked high will be exposed to affiliated media and Monthly
CHEERZ (*2) for recognition expansion

Users will be ranked
based on the number of“CHEERS” to each idol.

Motivation for CHEER (2) “Incentive”
Campaign such as photo presented by idols to fans who ranked high.

*1 A new business company established by our unique personnel system “U-start” (See p.37).
*2 A visual book with photos of idols who received high numbers of cheers per month. It is planned to be sold atbookstores, convenience stores located nationwide and Amazon.

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36

Our Unique Personnel System “U-Start “As an organizational effort to continue to develop new promising businesses, in April 2013
we have introduced a system to give our employee with outstanding performance a right toinvest in a new company to be started.

Start-up Support System “U-Start”

An employee who wasrecognized for outstanding
performance in business
operation andplanning/development of a
new businessOur
employee

PartialOver 50%
investment/
investment
becomescompany
representative Establishment of a
new company（Our consolidated
subsidiary)
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37

Organizational Strengths of Our Smartphone Media BusinessWe have generated profits from various types of services backed by our various “strengths andsystems” as an organization.
We will continuously develop and introduce our new services.
Features of human resources and organization
・”People with strength in net business, internallytransferred from other section,“ “mid-hires withspecialized skills,”and “new graduates with highpotential” work integrally.
・Corporate culture enabling cooperation beyond thelines of work categories.

Internal development skills
・High capability to plan and develop applications
internally and business development ability
・Internally-developed potent applications (with stronguser base) suppresses the cost for attracting users

We can start various projects with rightpeople at right locations in harmony withmarket changes

Planning & development, businessestablishment, and promotion can be
efficiently made within our company

Empirical value

Internal system

・Entered the application market in June 2010 during its
dawn. Released over 100 applications to date.

・Our own unique personnel system “U-start” (See p.37)
Offer a unique business start-up support system forour employees with high entrepreneurship andexcellent results.
Fogg, inc., an operator of “CHEERZ,” is the firstcompany this system applied.

・Have developed from scratch a large-scale service“CocoPPa,” which achieved 32 million downloads.

We have general knowhow obtained
through our abundant experience

We turn entrepreneurship of our excellent
employees into business power of thegroup
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38

Flow of RTB Advertisement
Flow of RTB Advertisement Transaction until Closing [(1) to (4) below take place within 0.05 second)(1) Impression occurs(2) Through SSP, device (browser) information such as frame size and user ID is sent to DSP as a bid request.
(3) Based on information of the bid request, an auction takes place at a preset price within DSP, selecting theadvertiser with the highest bidding price.
(4) The advertiser with the highest bidding price among DSPs wins the bidding and their ad is displayed.
Bidding price¥70

Advertiser

Media/User

(3)

¥80

SSP

DSP

¥60
¥50

(4)

(3)

¥70

(1)

(2)

¥80
¥60

SSP

DSP

¥90

(3)

DSP

SSP

¥60
Advantages for advertisers
Able to efficiently place ads for each impression
only to users they wish to display ads

Advantages for media
Able to offer ad space for bidding to multiple
advertisers and maximize profits
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39

VisionBecome the leading internet firm in Japan

MissionCreate new value through continued
challenges and contribute to society

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40