Second  Quarter,  Fiscal  Year  Ending  March  2014
Consolidated  Financial  Results

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

October  31,  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
Advertising  segment
Investment  segment  (*3)

Smartphone  media  businessCore  Operations

Other  media  businesses(*1)

RTB  advertising  business(*2)
Advertising  agency  business

Venture  capital  business

The  scale  of  operations  contracted  due  to  the  sale  of  stock  in  Mixi,  Inc.  
and  removal  of  subsidiaries  from  consolidated  reporting.

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

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

4	

2Q  (July-‐‑‒September)  Results  Highlights

Overall

2Q  Results• The  quarterly  operating  proﬁt  went  into  the  black,  with  both  revenue  and  proﬁt  increasing  over  the  previous  quarter.
(Operating  proﬁt:  1Q:  -‐‑‒109  million  yen  →  2Q:  70  million  yen)
• Driving  the  results  were  the  core  businesses  of  the  smartphone  media  business  and  the  RTB  advertising  business.

Core  Businesses

Smartphone  Media  Business

RTB  Advertising  Business• Sales  increased  by  2.4  times  over  the  previous  quarter.
• CocoPPa  worldwide  downloads  reached  15  million  on  September  30.
• Sales  of  apps  for  the  career  market  and  aﬃliate  media  also  expanded.
• Sales  increased  by  1.5  times  over  the  previous  quarter.
• In  August,  we  started  a  PC-‐‑‒compatible  in-‐‑‒house  advertising  platform(*).
*  In-‐‑‒house  advertising  platform  =  in-‐‑‒house  DSP  (“Bypass”)  and  in-‐‑‒house  SSP  (“AdStir”)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

5	

2Q  (July-‐‑‒September)  Consolidated  P/L  Statement  (Year-‐‑‒on-‐‑‒Year)In  the  media  segment,  the  smart  media  business  saw  growth,  and  in  the  advertising  segment,  the  end  of  advance  investment  in  the  RTB  advertising  business  improved  the  total  proﬁt  margin  on  sales  (9%→21%),  so  quarterly  operating  proﬁt  went  into  the  black  for  the  whole  company  too.

(million  yen)

2Q  of  FY  ending  March  2014

2Q  of  FY  ending  March  2013

Year-‐‑‒on-‐‑‒Year  Change  (%)

1,565

934

+68%	

 　Media  segment771

2+29,895%	

 　Advertising  segment

716

635

+13%	

 　Investment  segment

93

296

-­‐69%	 　Inter-‐‑‒segment  elimination

△16

-

-­‐	

Total  proﬁt  from  sales

459

292

+57%	

 　Media  segment259

1+19,673%	

 　Advertising  segment

150

55

+172%	 　Investment  segment

50

235

-­‐79%	

Operating  proﬁt

70

△38

-­‐	

 　Media  segment

81

△32

-­‐	

 　Advertising  segment

1

△87

-­‐	

 　Investment  segment

42

151

-­‐72%	 　Head  oﬃce  expenses

△55

△69

-

Recurring  proﬁt

71

△3

-­‐	

Quarterly  net  proﬁt

52

△167

-­‐	

Sales

・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.

6	

2Q  (July-‐‑‒September)  Consolidated  P/L  Statement  (compared  to  previous  quarter)

Both  core  businesses  of  the  smartphone  media  business  and  the  RTB  advertising  business  are  going  well.  The  advertising  segment  is  in  the  black.
(million  yen)

2Q  of  FY  ending  March  2014

1Q  of  FY  ending  March  2014

Quarter-‐‑‒on-‐‑‒Quarter  Change  (%)

1,565

1,159

+35%

 　Media  segment

771

571

+35%

 　Advertising  segment

716

581

+23%

 　Investment  segment

93

11

+713%

 　Inter-‐‑‒segment  elimination

△16

△5

-

Total  proﬁt  from  sales

459

288

+60%

 　Media  segment

259

166

+56%

 　Advertising  segment

150

118

+27%

 　Investment  segment50

3+1,244%

Operating  proﬁt

70

△109

-

 　Media  segment

81

0

-

 　Advertising  segment

1

△42

-

 　Investment  segment

42

△3

-

 　Head  oﬃce  expenses

△55

△63

-

Recurring  proﬁt

71

△96

-­‐	

Quarterly  net  proﬁt

52

△97

-­‐	

Sales

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

7	Media  Segment:  Comparison  of  Sales  with  Previous  Quarter

Smartphone  media  business  sales  increased  by  2.4  times  over  the  previous  quarter  due  to  growth  in  “CocoPPa,”  “apps  for  the  career  market”  and  “aﬃliate  media.”(million  yen)

800

Quarter-‐‑‒on-‐‑‒quarter  comparison  of  sales  in  the  media  segment■Other  media  businesses(*)■Smartphone  media  business

771

571
400

391

414

2.4  times
0

380

156
1Q  of  FY  Ending  March  2014

2Q  of  FY  Ending  March  2014

*  Other  media  businesses:  email  advertising,  internet  research,  sports  marketing

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

8	

Advertising  Segment:  Comparison  of  Sales  with  Previous  Quarter

RTB  advertising  business  sales  increased  by  1.5  times  over  the  previous  quarter,  mainly  due  to  increased  sales  from  the  advertising  platform.

Quarter-‐‑‒on-‐‑‒quarter  comparison  of  sales  in  the  advertising  segment(million  yen)■Advertising  agency  business■RTB  advertising  business

716

581

1.5  times

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

9	First-‐‑‒Half  Policies  Announced  at  Beginning  of  Quarter  and  Results[Results][Policies]
Due  to  advance  investment,  the  ﬁrst-‐‑‒half  (April-‐‑‒September)  operating  proﬁt  was  projected  to  be  in  the  red.
Smartphone  Media  BusinessIn  1H,  keep  focus  on  expanding  users.
① Concentrate  personnel  on  core  service  development  and  operation② Invest  in  advertising

Even  though  the  ﬁrst-‐‑‒half  operating  proﬁt  was  in  the  red,  2Ｑ  quarterly  operating  proﬁt  accelerated  and  went  into  the  black.

“CocoPPa”  downloads  went  from  6.07  million  in  previous  quarter  to  reach  15  million  at  end  of  2Q①Personnel  deployment  complete  in  1Q;  American  subsidiary  established.
②Trial  overseas  advertising  done.  Full-‐‑‒ﬂedged  advertising  to  be  done  in  3Q  and  thereafter.

RTB  Advertising  BusinessIn  1H,  also  start  PC  RTB  advertising① Focus  personnel  on  sales,  operation  and  development.
② Invest  in  costs  for  securing  RTB  advertising  inventory.

In  August,  the  supply  of  PC  RTB  advertising  was  started  with  the  in-‐‑‒house  advertising  platform.
① Personnel  deployment  complete  in  1Q.
② Inventory  is  increasing  well,  and  investment  for  securing  advertising  ended  in  the  previous  quarter.

In  the  second  half,  no  major  increases  in  personnel  are  needed.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

10	Full-‐‑‒Year  Projections  for  FY  Ending  March  2014

Results  will  expand  each  quarter  also  in  3Q  and  thereafter,  so  we  plan  to  have  full-‐‑‒year  consolidated  operating  proﬁt  go  into  the  black.

Projection  image  in  quarterly  consolidated  sales
Operating  proﬁt（million  yen）

Sales（milion  yen）

1,500

1,500	
  
1,159	
  300

Projection  image  in  quarterly  consolidated  operating  proﬁt

1,000

70	
  

500

200

100

0

0

△100

△	
  109	
  
1Q

2Q

3Q

4Q

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

11	Smartphone  Media  Business

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

12	Smartphone  Media  Business

The  smartphone  media  business  comprises  the  following  three  elements.

 　 　 　 　 　 　 　 　 　“CocoPPa”

 　 　 　 　 　 　 　 　 　 　 　The  Smartphone  Decoration  Community  App 　 　 　 　 　 　 　 　 　 　 　Reached  15  million  downloads(*) 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　*  As  of  September  30,  2013

“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.

13	

“CocoPPa”  2Q  Programs
In  the  smartphone  media  business,  we  will  focus  on  expanding  of  the  “CocoPPa”  user  base  and  renewal  of  service.

Major  update  was  done  on  September  26  for  the  Android,  and  on    September  30  for  the  iOS.
*See  p.  16  for  details.

“CocoPPa”“The  Smartphone  Decoration  Community  App”
A  free  mobile  application  that  allows  users  to  download  and  post  illustrations  freely  to  customize  the  icons  and  their  wallpaper  on  the  home  screen.
•July  19,  2012:  Launched  in  the  Apple  App  Store•May  29,  2013:  Launched  in  Google  Play

Customize  examples

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

14	

“CocoPPa”  Downloads  and  Global  Popularity
Downloads  of  “CocoPPa”  reached  15  million  on  September  30,  2013.(*)
39%  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”(million)

Breakdown  of  cumulative  “CocoPPa”  downloads  by  country

15  million

Others  17%

U.S.

iOS  (released  July  19,  2012)
Android  (released  May  29,  2013)
Italy  2%Thailand  2%Australia  2%
France  2%
China  2%Germany  3%
Brazil  3%
Canada  3%
Taiwan  4%
United  Kingdom  4%

Jul.

Oct.

Jan.

Apr.

Jul. September  30

Japan  17%

*For  details,  refer  to  the  press  release  dated  October  2,  2013	

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

15	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  screen  (comments)

Users  from  around  the  world  write  comments  on  the  pages  of  creators,  saying:  ”This  icon  is  cute.”  or  “I  like  your  sense  of  style.”

Icons  and  wallpaper  are  contributed  from  around  the  world  (free)
260,000  icons,  70,000  wallpapers  by  the  end  of  September

Post
Decorating  users

Exchanges  between  users  (motivation  for  creators  to  post)*In  English,  Chinese,  Arabic,  German  and  many  other  languages

Creator  replies:“Thank  you  for  the  comments.”  “I  am  glad  I  contributed.”*In  many  languages  by  Smartphone  screen  decorated  using  posted  material  (free)

There  is  ample  communication  among  users  based  on  posted  materials,  etc.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Japanese  users  using  the  translation  functions16	

“CocoPPa”  Renewal  Program
We  did  a  major  update  of  the  Android  on  September  26th,  and  the  iOS  on  the  30th,  mainly  enhancing  the  ”decoration”  and  the  ”social  networking”  features  help  the  users  active.

Overview  of  Renewal
Home  Screen  Batch  Download

Home  Screen  post

Decoration

Users  can  contribute  the  home  screens  they  created  all  at  once.  
Home  screens  contributed  by  others  can  also  be  downloaded  as  a  batch.

Batch  download  of  a  home  screen  set  (multiple  icons  &  wallpaper)  is  now  available.  Setting  in  alump  is  also  possible.

Social  Networking

My  Page  (Proﬁle)Latest  Information  Feed

Each  user  can  have  their  own  “my  page,”  permitting  communication  between  users.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Users  can  get  recommended  material  and  event  information  in  real  time,  and  can  “like”  and  comment  on  posts.

17	

“CocoPPa”  3Q  Programs

The  major  update  is  over,  and  we  plan  to  introduce  the  following  monetization  in  the  future.

In-‐‑‒apps-‐‑‒purchase  Contents  Tie-‐‑‒Up  Advertisements  (to  be  launched  in  November）(to  be  launched  in  mid-‐‑‒3Q)

In  addition  to  the  Sanriowave  characters  already  announced,  more  than  100  types  of  home  screen  sets(multiple  icons  +  wallpapers)  will  be  available  in  “CocoPPa”  store

Get  advertising  revenue  the  sponsor  company.  The  corporate  characterʼ’s  icons  &  wallpapers  will  be  delivered.

￥
￥

100

contents

FREE!

￥
￥

(For  Reference)
Domestic  feature  phone  decoration  market  size  in  2010:  ¥33  billion(July  2012  survey  by  Mobile  Content  Forum)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

18	

“CocoPPa”  3Q  Programs
In-‐‑‒apps-‐‑‒purchase  Contents  (to  be  launched  in  November)Home  screen  sets  (multiple  icons  +  wallpapers)  of  characters  and  talent,  etc.  
will  be  sold  as  paid  content.  More  and  more  of  the  characters  will  be  added  in  the  future.
Content  lineup  at  service  launch

Only  a  portion  is  given  below.  About  30  home  screen  sets  are  expected  at  service  launch.
About  100  home  screen  sets  ﬁnished  contract  will  release  soon  afterwards.
Mofy  the  RabbitTiny  Twin  Bears

Kumadeppa

SnoopyDomo-‐‑‒kun

Doraemon©aki  kondo  /  SCP  	©BANDAI／LLP©2013  KUMADEPPA  COMICS.    	©2013  Peanuts  Worldwide  LLC	©NHK・TYO	

©Fujiko-‐‑‒Pro	

Panpaka
Pants

Eagle  Talon(Yoshida  kun)

PusheenMy  Melody

MoominGaspard  and  Lisa©みんなで歌おう！キャラソン委員会 　	©蛙男商会/DLE©Pusheen  Corp.  
©VISION  FACTORY  CO.,LTD.
©driven.inc	

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Hello  Kitty

Little  Twin  Stars©2013  Sony  Creative  Products  Inc.
TM	GASPARD  ET  LISA   　  Hachette  Livre.	

19	

“CocoPPa”  3Q  Programs
Tie-‐‑‒Up  Advertisements  (to  be  launched  in  mid-‐‑‒3Q)
New  monetizing  model  of  “CocoPPa”,  revenue  from  sponsors  through  the  supply  of  corporate  characters  materials  to  users.

Advertiser

Users

￥
• Advertisement  submission  fees
• Supply  content  such  as  corporate  characters

FREE!
Sets  of  home  screens  created  using  corporate  products,  logos,  characters,  etc.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Available  for  free20	“CocoPPa”  4Q  and  Later  Programs
CocoPPa  Avatars  (provisional  name)  (to  be  launched  in  mid-‐‑‒4Q)•As  the  2nd  round  of  the  paid  business,  we  plan  to  globally  release  a  Smartphone  Avatar  Community  tied  closely  to  CocoPPa  as  a  separate  app  (App  Store/Google  Play).
•Cross  promotion  through  tie-‐‑‒ups  such  as  exchanging  a  created  the  images  of  avatar  on  a  “my  page”  within  CocoPPa.
•Clothing  items  that  the  avatars  wear  are  envisioned  as  a  major  revenue  source.
•To  be  promoted  as  a  joint  business  with  G-‐‑‒Crest,  a  major  player  in  this  domain.

•CocoPPa  user  base
•Operates  global  smartphone  apps,  has  marketing  know-‐‑‒how

Joint  business•Avatar  community  operation
know-‐‑‒how•Paid  business  construction
know-‐‑‒howG-‐‑‒Crest,  Inc.  http://www.gcrest.com•100%  subsidiary  of  CyberAgent,  Inc.
•Has  experience  with  the  planning,  development  and  operation  of  “Pocket  Land”  and  other  avatar  communities.

Joint  Operation  of  “CocoPPa  Avatars  (provisional  name)”
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

21	

Apps  for  the  Career  Market

The  eight  apps  supplied  for  the  “au  Smart  Pass”  operated  by  KDDI  contribute  to  revenues.
■Games■Horoscopes■Education
Magic  Mental  Arithmetic!!

Mentality
Test“TAP  10”
Puzzle  game  popular  with  adults  which  has  500,000  downloads  for  the  iPhone.

“Love  Mentality  Test  Diagnosis”[Luck  ×  personality  ×  mentality]  The  ultimate  love  horoscope  app  which  reads  you  from  three  angles.

“Indian-‐‑‒Style  Magic  Mental  Arithmetic”
Learn  the  Indian-‐‑‒style  method  of  calculating  2  digit  ×  2  digit  multiplication  from  the  level  of  the  true  beginner.

■Gourmet/Recipes
Recipe  Secret  Techniques“Simple  Recipes  and  Secret  Techniques”
Full  of  lots  of  practical  food  information  that  you  can  start  using  today.

Simple  Snack  Recipes“Simple  Snack  Recipes”
Full  of  recipes  for  simple  snacks  that  you  can  whip  up  when  you  want  to  eat  something  with  your  favorite  drink.

“Wine  365”
Contains  multiple-‐‑‒choice  quizzes  to  let  you  learn  knowledge  about  wine.

“Sushi  365”
Contains  real-‐‑‒life  quizzes  that  can  be  enjoyed  by  the  sushi  connoisseur  to  the  sushi  chef.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

“cheese  365”
Contains  multiple-‐‑‒choice  quizzes  to  let  you  learn  knowledge  about  cheese.

22	Programs  for  the  Future:  Startup  Support  System  “U-‐‑‒Start”

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.
Startup  Support  System  “U-‐‑‒Start”	
Employees  found  to  have  experience  in  business  operation  and  the  proposing  and  startup  of  new  businesses.

Our  Employees

Partial  investment,  nominated  President

Majority  of  investment

New  company  is  established(Consolidated  subsidiary  of  United)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

23	

Programs  for  the  Future

As  the  ﬁrst  “U-‐‑‒Start”  business,  the  company  Fogg,  Inc.  established  in  May  2013  will  release  a  new  service  named  “iam”  soon.

“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/LinkedIn

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  →  Facebook/LINE/twitter

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

24	

Projects  with  DeNA  Co.,  Ltd.

In  addition  to  the  current  business  tie-‐‑‒up  with  DeNA  Co.,  Ltd.  on  the  “Groovy”  music  player,  a  tie-‐‑‒up  on  the  communications  app    “comm”  will  be  done  in  the  future.
Projects  with  DeNA  Co.,  Ltd.  up  until  now

In  the  future

The  tie-‐‑‒up  on  “Groovy”  will  continue

United  exclusively  operates  the  aﬃliate  media  within  “Groovy”  as  a  joint  business  of  the  two.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

New  tie-‐‑‒up  opportunity  in  currently  major  updated  “comm”.

25	

Investment  in  Kouzoh  Inc.

We  will  invest  in  Kouzoh  Inc.  which  operates  the  “mercari”  ﬂea  market  app  in  the  C-‐‑‒to-‐‑‒C  commerce.
mercariFlea  market  app  that  lets  users  easily  exhibit  from  a  smartphone
The  app  features  a  user  interface  specially  designed  for  smartphones  and  tablets  for  exhibiting  products  of  all  genres.
Kouzoh  Inc.    http://kouzoh.com•Operates  the  “mercari”  person-‐‑‒to-‐‑‒person  marketplace•Established  in  February  2013,  with  United  obtaining  a  14.5%  share  in  August  (the  United  investment  was  ¥220  million  yen;  also,  we  underwrote  ¥80  million  in  warrants)
President/CEO:  Shintaro  Yamada•Has  the  experience  of  starting  up  “Rakuoku”  at  Rakuten.  Inc.
•Thereafter,  started  up  many  web  services  including  “Machitsuku!”  at  Unoh  before  selling  the  company  to  Zynga,  Inc.  in  2010.
•Founded  Kouzoh  in  February  2013.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

26	

Investment  in  Wonderplanet  Inc.
• Invested  100  million  yen  in  Wonderplanet  Inc.  which  handles  native  apps  and  games  for  tablets/smartphones.

Name:  Wonderplanet  Inc.
 　 　 　 　http://wonderpla.net
Representative:  President/CEO  Tomoki  Tsunekawa
Headquarters:  Nagoya,  Aichi
Capital:  36  million  yen

• Operated  by  members  with  a  wealth  of  experience  of  games  and  other  internet  service  at  Opencube  Inc.,  CyberAgent  Inc.,  Zynga  Japan  etc.
• Based  in  Nagoya,  they  continue  to  employ  brilliant  engineers  from  the  Toki  area.
• In  the  future,  they  will  continuously  release  new  native  apps  and  games,  aiming  for  rapid  growth.

Employees:  24

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

27	

Future  Expansion  of  the  Smartphone  Media  Business• The  revenue  of  current  basis  for  the  smartphone  media  business  are  “CocoPPa  (advertising  revenue),”  “apps  for  the  career  market”  and  “aﬃliate  media.”• In  addition  to  the  growth  in  each  domains,  in  3Q  and  thereafter,  paid/tie-‐‑‒up  advertising  in  “CocoPPa”/”CocoPPa  Avatars  (provisional  name)  will  start  up.
• As  new  services,  the  new  Fogg  service  “iam”  and  the  like  will  contribute  to  future  revenues.
• As  projects  with  the  3rd  party,  we  will  collaborate  with  DeNA  Co.,  Ltd.  on  “comm”  and  invest  in  Kouzoh  and  Wonderplanet.
Image  of  expanded  sales  from  smartphone  businesses
Current  Revenue
CocoPPa  (existing  advertising  revenue)
Apps  for  the  career  market
Aﬃliate  media

Future  Revenue
Consistent  growth  of  the  “current  revenue”  of
CocoPPa  (existing  advertising  revenue)
Apps  for  the  career  market
Aﬃliate  media

New  monetization  from  CocoPPa  in  3Q  and  thereafter(Paid,  tie-‐‑‒ups,  etc.)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Future  new  services  including  “iam”

28	

RTB  Advertising  Business

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

29	

RTB  Advertising  Business  2Q  Business  Progress

Smartphone  RTB  sales  from  the  in-‐‑‒house  advertising  platform(*)  increased  by  1.6  times  over  the  previous  quarter(E-‐‑‒commerce,  personnel  recruiting  service  and  other  advertising  increased)

In  August,  we  launched  a  PC-‐‑‒based  service  to  permit  advertising  to  be  served  in  a  cross-‐‑‒device  manner.

*  In-‐‑‒house  advertising  platform  =  in-‐‑‒house  DSP  “Bypass”  and  in-‐‑‒house  SSP  ”AdStir”

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

30	

Strengths  of  the  In-‐‑‒House  Advertising  Platform
By  deploying  both  DSP  and  SSP  ourselves,  we  have  two  revenue  opportunities  for  each  advertisement  served.

User

Media

UnitedSSP

UnitedDSP￥￥

Ads  served

Advertiser

We  have  two  revenue  opportunities  for  each  advertisement  served

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

31	

Business  Progress  of  the  In-‐‑‒House  Advertising  Platform

The  in-‐‑‒house  DSP  “Bypass”  has  exceeded  1,000  companies(*)  as  the  number  of  advertisers  since  the  service  launch  in  April  2012  (*)  Announced  September  3,  2013

The  advertisement  inventory  of  the  in-‐‑‒house  SSP  “Adstir”  continues  to  increase,  with  ad  requests  in  July-‐‑‒September  increasing  to  27.7  billion  requests,  or  1.5  times  those  in  the  previous  quarter.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

32	Trends  in  the  RTB  Advertising  Market  (U.S.  and  Japan)

The  U.S.  RTB  advertising  market  is  projected  to  expand  to  approximately  700  billion  yen  in  FY  2016,  while  the  Japanese  RTB  advertising  market  is  projected  to  expand  to  73  billion  yen  in  FY  2016.  This  is  projected  to  be  the  high  growth  rate  within  the  internet  advertising  market.
Forecast  of  U.S.  RTB  advertising  market  size

Forecast  of  Japanese  RTB  advertising  market  size

(million  US  dollars)(billion  yen)

8,000	
  

7,059

7,000	
  
5,782

6,000	
  
4,551

5,000	
  4,000	
  3,357

3,000	
  2,000	
  

1,947
5%

8%

10%

11%

12%

1,000	  0	
         2015年	
      
       2013年	
       2014年	
       2016年	
2012年	

40%	
  

  
800	
  

35%	
  

700	
  

35%	
  

30%	
  

600	
  

30%	
  

25%	
  

500	
  

25%	
  

20%	
  

400	
  

20%	
  

15%	
  

300	
  

15%	
  

10%	
  

200	
  

5%	
  

100	
  

0%	
  

    

0	
  

730

135
2%

3%

5%

6%

6%

      
      
      
      
      
2012年	
2013年	
2014年	
2015年	
2016年	

40%	
  

10%	
  
5%	
  
0%	
  

      
RTB経由のディスプレイ広告市場規模
Size  of  display  ad  market  via  RTB

RTB経由のディスプレイ広告市場規模
Size  of  display  ad  market  via  RTB

RTB  advertising  share  of  overall  internet  ad  market
インターネット広告市場全体に占めるRTB広告⽐比率率率

RTB  advertising  share  of  overall  internet  ad  market
インターネット広告市場全体に占めるRTB広告⽐比率率率

Source:  eMarketer  US  Real-‐‑‒Time  Bidding  (RTB)  Digital  Display  Ad  Spending,  2010-‐‑‒2016  Nov  15,  2012
(RTB  advertising  share  of  overall  market  calculated  by  United)

Source:  Seed  Planning,  Inc.,
Domestic  RTB  Advertising  Market  Size  2011-‐‑‒2016,  September  2012
(RTB  advertising  share  of  overall  market  calculated  by  United)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

33	

Players  in  the  Domestic  RTB  Advertising  Market  (DSP  Operators)

Among  DSP  operators,  the  scale  of  sales  of  the  three  companies  leading  in  the  PC  space  is  large,  but  in  the  smartphone  space,  United  has  the  largest  scale  of  domestic  sales.  (Market  scales  are  based  on  surveys  by  United.)
2011  on:  Led  by  starting  RTB  advertising  on  PC
MicroAd,  Inc.:  “MicroAd  BLADE”  DSP

FreakOut,  Inc:  “FreakOut”  DSP

Platform  One,  Inc.:  “MarketOne”  DSP

2012  on:  RTB  advertising  on  smartphones  started

United,  Inc.:  “Bypass”  DSPL

Largest  scale  in  the  domestic  smartphone  space

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

34	

Strengths  of  the  In-‐‑‒House  Advertising  Platform

With  87％  of  internet  users(*)  using  both  smartphones  and  PCs  or  other  multiple  devices,  there  is  a  stronger  need  for  advertisers  to  serve  cross-‐‑‒device  advertisements.
▶In  the  in-‐‑‒house  DSP  also,  cross-‐‑‒device  ad  serving  becomes  possible  with  the  start  of  PC  service.

Ads  served

User

Advertiser

Views  net  while  switching  among  multiple  devices
RTB  ad  service  across  multiple  devices  to  the  same  user
*Source:  Google  Multi-‐‑‒Screen  World  survey  data  (published  July  29,  2013)
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

35	

Summary  of  the  RTB  Advertising  Business• Growth  in  smartphone  RTB  sales  of  the  in-‐‑‒house  advertising  platform  is  the  engine  for  growth  in  the  RTB  advertising  business.
• With  the  start  of  PC  support  by  the  in-‐‑‒house  advertising  platform,  it  is  possible  to  meet  future  needs  for  cross-‐‑‒device  serving.

Image  of  expanding  sales  in  the  RTB  advertising  businessCurrent  Revenue

Future  Revenue

Smartphone  RTB  advertising  on  in-‐‑‒house  advertising  platform

Continued  growth  in  smartphone  RTB  advertising  on  in-‐‑‒house  advertising  platform

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Increased  revenue  from  PC  support  and  cross-‐‑‒device  serving

36	Overall  Summary• The  two  core  businesses  of  the  smartphone  media  business  and  the  RTB  advertising  business  continue  to  grow.
• In  2Q,  quarterly  operating  proﬁt  was  in  the  black.  With  the  end  of  the  advance  investment  period,  we  plan  to  produce  revenue  in  the  second  half.
• We  will  put  operating  proﬁts  in  the  black  over  the  full  year,  and  build  a  foundation  for  revenue  with  a  view  ﬁxed  on  next  year  and  thereafter.

Smartphone  Media  Business

RTB  Advertising  Business

Important  3Q  Policy:  Expand  “CocoPPa”  user  base  and  diversify  revenue  sources

Important  3Q  Policy:  Smartphone  &  PC  multi-‐‑‒device  support

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

37	

2 　Reference  Material

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

38	

Consolidated  Balance  Sheet  for  this  Quarter

Fixed  assets  increased  by  237  million  yen  due  to  investments  in  Kouzoh  Inc.  and  others,  and  current  liabilities  increased  by  190  million  yen  due  to  increased  accounts  payable.
(million  yen)End  of  This  Quarter(June  2013)End  of  Previous  Quarter(Sept.  2013)

Increase/  Decrease

Current  assets

5,508	

5,488	

+19

(Cash  on  hand)(3,309)	

(3,555)	

(-246)	

Fixed  assets

840	

603	

+237	

Current  liabilities

1,044	

854	

+190	

Fixed  liabilities

0	

2	

-2	

5,304	

5,235	

+68	Net  assets

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

39	

Cash  Flow  Calculations  for  This  Quarter

The  “cash  ﬂow  from  investment  activities”  was  -‐‑‒907  million  yen  due  to  a  change  in  categories  and  investment  in  Kouzoh  Inc.,  etc.
(April–September  2013)(million  yen)This  2Q  consolidated  cumulative  period
Cash  ﬂow  from  sales  activities-33	

Cash  ﬂow  from  investment  activities-907	

Cash  ﬂow  from  ﬁnancial  activities

89

Increase/decrease  in  cash  and  cash  equivalents-850	

Quarter-‐‑‒end  balance  of  cash  and  cash  equivalents709	

・Time  deposit  that  have  more  than  three  months  until  maturity  are  not  included  in  the  “Quarter-‐‑‒end  balance  of  cash  and  cash  equivalents”.(Applicable  deposit  balance  of  the  at  the  end  of  September  2013:2,600  million  yen)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

40	

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.)

is  served  a  real  estate  advertisement

Advertiser:  Cafe

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.
AuctionUser  A

DSP
A

SSP
Advertising  from  winning  advertiser  is  servedAdvertiser  bid  data

¥0.05
for  User  A

DSP
A
DSP
B
DSP
C

Bids

Cafe
Car  Company

Bids

¥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.

41	Merits  of  RTB  AdvertisingThrough  the  DSP  and  SSP,  the  advertiser  can  choose  among  many  users  and  narrow  down  the  targets  of  advertising  served  to  designated  target  users.

SSP

Advertisement
  display

SSP

DSP

SSP
User  as  advertising  target

Media

Beneﬁts  to  Media  (Sellers)Advertisings  can  be  sold  at  higher  unit  prices,  leading  to  increased  media  advertising  revenues.

Advertiser

Beneﬁts  to  Advertisers  (Buyers)
Advertisers  can  analyze,  control  and  optimize  the  eﬀectiveness  of  advertising.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

42	

VisionBecome  the  leading  internet  ﬁrm  in  Japan

MissionCreate  new  value  through  continued  challenges  and  contribute  to  society

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

43