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October 2011
Mixi Monetize Programs
mixi Ad Program (mAP)




                        2
mixi Ad Program (mAP)

            Summary


        ○    Ad Spaces
                  ○     Mixi offers the ad program for
                           ●   PCs
                           ●   Feature Phones
                           ●   Smartphones (web-based)
                           ●   Native App - Android
                           ●   Native App - iOS
        ○    mAP Sales Calculation
        ○    mAP Process
                  ○     Create a bank account
                  ○     Register a bank account
                  ○     Select Application
                  ○     Agree to terms and conditions
                  ○     Screening Process



Strictly confidential                           Copyright 2011   © mixi,Inc. All right reserved.                           3
mixi Ad Program (mAP)

         Ad Spaces (PC, Feature Phone, Smartphone)
                               PC                                    Feature Phone                                    Smartphone
                             Ad A                                                                                           Ad A
                                                             Header




               Application                    Ad                                                                      Application
                                              B
                                                        Application

                                                                                                                             Ad B



                           Ad C                                Footer




        Ad          Size             Format               Ad             Size                          Format   Ad         Size     Format

        Ad A        468×60 pixels    Gif or Flash         Header         192×53pixels                  Gif                 320×48
                                                                                                                Ad A & B            Gif
                                                                                                                           pixels
        Ad B        120×600 pixels   Gif or Flash                        Title – [Ad] + 14
                                                                         characters
                                                                         Body – 19 characters
        Ad C        728×90 pixels    Gif or Flash
                                                          Footer         A character includes          Text
                                                                         Japanese letters,
                                                                         romantic letters and
                                                                         spaces




Strictly confidential                               Copyright 2011   © mixi,Inc. All right reserved.                                         4
mixi Ad Program (mAP)

            mAP Sales Calculation (PC, Feature Phone, Smartphone)

                   Daily Sales in JPY = (DAU * UU unit price) + (frequency of ad * [CPI, 3 JPY])
                                   Avg. DAU            UU unit price                      UU unit price                   UU unit price
                                                       (no in-app purchases)              (using mPP)                     (using other purchase settlement)

                                   Less than 50,000               0.3                              0.3                                     0.3

                 PC                50,000 – 99,999                0.5                              0.4                                     0.3
             UU unit price         100,000-249,999                0.7                             0.45                                     0.3

                                   250,000-499,999                0.9                              0.5                                     0.3

                                   Over 500,000                   1.1                             0.55                                     0.3


                                   Avg. DAU                UU unit price                       UU unit price
                                                           (no in app purchases)               (using in app purchases)

                                   Less than 100,000                     0.3                              0.3
               Feature
                                   100,000 – 199,999                     0.5                              0.4
                Phone
             UU unit price         200,000-499,999                       0.7                              0.45

                                   500,000-999,999                       0.9                              0.5

                                   Over 1,000,000                        1.1                              0.55


                                   Less than 20,000                      0.3                              0.3

                                   20,000 – 39,999                       0.5                              0.4
              Smartphone
                                   40,000-99,999                         0.7                              0.45
             UU unit price
                                   100,000-199,999                       0.9                              0.5

                                   Over 200,000                          1.1                              0.55




Strictly confidential                                  Copyright 2011   © mixi,Inc. All right reserved.                                                       5
mixi Ad Program (mAP)

              Ad Spaces (Android /iOS Native)



                   Android / iOS                                    Daily Sales in JPY = (DAU * UU unit price)

                                                            Avg. DAU                   UU unit price            UU unit price
                           Mixi Ad                                                     (no in app purchases)    (using in app purchases)


                                                            Less than 10,000                         0.3                0.3

                                                            10,000 – 19,999                          0.5                0.4

                                                            20,000-49,999                            0.7               0.45

                                                            50,000-99,999                            0.9                0.5

                                                            Over 100,000                             1.1               0.55
                        Application




         Ad         Size                 Format

         Ad A       Width100%×25Pixels   Gif




Strictly confidential                             Copyright 2011   © mixi,Inc. All right reserved.                                         6
mixi Ad Program (mAP)

            mAP Process


                             Must register a Japanese Bank Account (transaction fees are minimized for the application provider).
                             The name of the account holder should be the same name registered in Developer Registration or Registration
             Create a bank   for the Partner Account.
                account      mixi will not be able to make payments if there is insufficient or inaccurate information.
                             Any changes to the bank account must be made before the 20 th of the month prior to the payment month (e.g.
                             changes must be made by January 2011 for them to be reflected for payments made on February 2011).


              Register a
             bank account    Log into “mixi Business Support” and register a Japanese bank account




                Select       The home page of “mixi business support” will display a list of the applications developed by you. Please
              Application    select the application in which you would like to register for the mixi ad program




            Agree to terms   Please agree to the mixi ad program terms and conditions prior to applying
              and cond.      http://developer.mixi.co.jp/en/appli/policies/map/terms/




              Screening      1. For a first-time applicant, the Company sends a document to name and address registered in Developer
               process       Registration. The document may not be sent for a corporate developer who registered for a partner account.
                             2. The Company reviews the mixi App registered for this program. (maximum of 5 business days).
                             3. Upon approval, the advertisement distribution will begin and a notification will be sent by email. If the
                             application is not approved, the applicant will also be notified by email.




Strictly confidential                                Copyright 2011   © mixi,Inc. All right reserved.                                       7
mixi Payment Program (mPP)




                             8
mixi Payment Program (mPP)

            Summary

            ○    mPP Payment Service
                               ●   PCs
                               ●   Feature Phones
                               ●   Smartphones (web-based)
                               ●   Native App - Android
                               ●   Native App - iOS
            ○    mPP Incentives
            ○    mPP Process
                        ○   Submit Application to mixi
                        ○   Submit forms to mixi
                        ○   Screening process
                        ○   Develop and test on application
                        ○   Launch




Strictly confidential                               Copyright 2011   © mixi,Inc. All right reserved.                                9
mixi Payment Program (mPP)

            mPP Payment Scheme (PC, Feature Phone, Smartphone, Android)



                                          Transactions Fees                                               Payment based on # of points
                                                                                                              used in application
                                                10.5%

                                                   11                                                                75
                                                  JPY                                                               JPY
                                                                                                                            71.4%        Application Provider
                        Mobile Carriers
                          and others


                                                                        105            100
                                                   Purchase Points      JPY            pts          Supply Points




                                                                                                               Use Points

                                                                              User                                             100
                                                                                                                               pts




                Platform                       Payment Method for Points
                PC                             ①Credit Card, ②WebMoney, ③Payment through cell phone
                Feature Phone                  ①Payment through cell phone, ②WebMoney (only for NTT Docomo)
                Smartphone                     ①Credit Card, ②WebMoney

                Android SDK                    ①Credit Card ,②Google Checkout


Strictly confidential                                            Copyright 2011      © mixi,Inc. All right reserved.                                            10
mixi Payment Program (mPP)

            Discount Program based on DAU and In-app purchase rate (PC, Feature Phone, Smartphone)



                                                                                                Average DAU

                                      In-app purchase rate           5,000 - 9,999             10,000-19,999                >20,000
                       PC
                Discount Program      8%-10%                              1%                         2%                        3%

                                      10%-15%                             2%                         2%                        3%

                                      >15%                                3%                         3%                        3%



                                                                                                Average DAU
                     Feature
                                      In-app purchase rate         40,000 - 99,999           100,000 - 199,999             >200,000
                      Phone
                Discount Program      8%-10%                              1%                         2%                        3%

                                      10%-15%                             2%                         2%                        3%

                                      >15%                                3%                         3%                        3%


                                                                                                Average DAU

                                      In-app purchase rate          20,000 -49,000            50,000 - 99,999              >100,000
                     Smartphone
                                      8%-10%                              1%                         2%                        3%
                  Discount Program
                                      10%-15%                             2%                         2%                        3%

                                      >15%                                3%                         3%                        3%



                                                                         In-app purchase rate is calculated by (in app purchase MAU / MAU)




Strictly confidential                             Copyright 2011   © mixi,Inc. All right reserved.                                           11
mixi Payment Program (mPP)

           mPP Payment Scheme (iOS)



                                         Fees                                              Revenue Share (contract)
                                        30%

                                          31.5
                                          JPY                                                         ?
                                                                                                            ?         Application Provider
                        Apple




                                Payment Platform                                             Social Graph

                                                            mixi User




               ○    Apple requires developers to use the iOS payment system (30%)
                    therefore the remaining 70% is split between mixi and the developer
               ○    The revenue share percentage is agreed upon and documented in a
                    contract

Strictly confidential                              Copyright 2011   © mixi,Inc. All right reserved.                                          12
mixi Payment Program (mPP)

            mPP Process


               Submit
             Application   Agree to the terms and conditions, then sign and submit application form to mixi.
               to mixi


                Submit
                           Fill out forms to describe the application and the types of capabilities it will have and send the forms
               forms to    to mpp_info@mixi.co.jp
                 mixi


              Screening
               process     mixi will review the application. A notification of approval or rejection will be sent via email.



            Develop and    Develop and test the payment system. If the application is already on the mixi platform, use a test
                           application. The application must be approved by mixi before it is launched, therefore a test approval
              test on
                           request must be submitted.
            application


                           Once approved by mixi, the payment system can be launched in the application and appropriate
               Launch      payments will be made to the application provider.




Strictly confidential                             Copyright 2011   © mixi,Inc. All right reserved.                                    13
UU Bonus Program




                   14
UU bonus

            UU Bonus (incentives for apps that do not use mPP)



              PC

                                                                                         ○    Only devices that do not
                                                                                              have in-app purchases
                                                                                              can qualify for this
                                                                                              program
               Feature Phone                                                             ○    Only applications that
                                                                                              are categorized as one of
                                                                                              the following can qualify
                                                                                                  ○   Entertainment
                                                                                                  ○   Horoscopes and
              Smartphone (web based, native)                                                          Assessments
                                                                                                  ○   Communication
                                                                                                  ○   Learning
                                                                                                  ○   Tools




Strictly confidential                          Copyright 2011   © mixi,Inc. All right reserved.                                   15
Payment Method




                 16
Payment Method

            mixi Payment Rules



                                        x JPY                                              (x JPY – 420 JPY) remitted
           Payment                                                                                   10th

                                     1st month                          2nd month                           3rd month
              ○    The statement is calculated at the end of each month (x JPY) and the payment is made on
                   the 10th of the 2nd month after the calculation month
              ○    A remittance fee of 420 JPY is deducted from the payment amount
              ○    In the event the remittance could not be completed due to a lack of or inaccuracy of
                   information provided by the application developer, mixi will not refund the 420 JPY
                   remittance cost and will charge an additional 840 JPY for cancellation fees


                                                     •      2,000 JPY/month required for remittance (xJPY > 2000
                                                            JPY for payment)
                                                               Any monthly payments that do not surpass 2,000
                                                                 JPY are deferred to the next
                                                               Payment is then made when the aggregate of
                                                                 each month surpasses 2,000 JPY




Strictly confidential                             Copyright 2011   © mixi,Inc. All right reserved.                                 17

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mixi Payment Program and mixi Ad Program

  • 2. mixi Ad Program (mAP) 2
  • 3. mixi Ad Program (mAP) Summary ○ Ad Spaces ○ Mixi offers the ad program for ● PCs ● Feature Phones ● Smartphones (web-based) ● Native App - Android ● Native App - iOS ○ mAP Sales Calculation ○ mAP Process ○ Create a bank account ○ Register a bank account ○ Select Application ○ Agree to terms and conditions ○ Screening Process Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 3
  • 4. mixi Ad Program (mAP) Ad Spaces (PC, Feature Phone, Smartphone) PC Feature Phone Smartphone Ad A Ad A Header Application Ad Application B Application Ad B Ad C Footer Ad Size Format Ad Size Format Ad Size Format Ad A 468×60 pixels Gif or Flash Header 192×53pixels Gif 320×48 Ad A & B Gif pixels Ad B 120×600 pixels Gif or Flash Title – [Ad] + 14 characters Body – 19 characters Ad C 728×90 pixels Gif or Flash Footer A character includes Text Japanese letters, romantic letters and spaces Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 4
  • 5. mixi Ad Program (mAP) mAP Sales Calculation (PC, Feature Phone, Smartphone) Daily Sales in JPY = (DAU * UU unit price) + (frequency of ad * [CPI, 3 JPY]) Avg. DAU UU unit price UU unit price UU unit price (no in-app purchases) (using mPP) (using other purchase settlement) Less than 50,000 0.3 0.3 0.3 PC 50,000 – 99,999 0.5 0.4 0.3 UU unit price 100,000-249,999 0.7 0.45 0.3 250,000-499,999 0.9 0.5 0.3 Over 500,000 1.1 0.55 0.3 Avg. DAU UU unit price UU unit price (no in app purchases) (using in app purchases) Less than 100,000 0.3 0.3 Feature 100,000 – 199,999 0.5 0.4 Phone UU unit price 200,000-499,999 0.7 0.45 500,000-999,999 0.9 0.5 Over 1,000,000 1.1 0.55 Less than 20,000 0.3 0.3 20,000 – 39,999 0.5 0.4 Smartphone 40,000-99,999 0.7 0.45 UU unit price 100,000-199,999 0.9 0.5 Over 200,000 1.1 0.55 Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 5
  • 6. mixi Ad Program (mAP) Ad Spaces (Android /iOS Native) Android / iOS Daily Sales in JPY = (DAU * UU unit price) Avg. DAU UU unit price UU unit price Mixi Ad (no in app purchases) (using in app purchases) Less than 10,000 0.3 0.3 10,000 – 19,999 0.5 0.4 20,000-49,999 0.7 0.45 50,000-99,999 0.9 0.5 Over 100,000 1.1 0.55 Application Ad Size Format Ad A Width100%×25Pixels Gif Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 6
  • 7. mixi Ad Program (mAP) mAP Process Must register a Japanese Bank Account (transaction fees are minimized for the application provider). The name of the account holder should be the same name registered in Developer Registration or Registration Create a bank for the Partner Account. account mixi will not be able to make payments if there is insufficient or inaccurate information. Any changes to the bank account must be made before the 20 th of the month prior to the payment month (e.g. changes must be made by January 2011 for them to be reflected for payments made on February 2011). Register a bank account Log into “mixi Business Support” and register a Japanese bank account Select The home page of “mixi business support” will display a list of the applications developed by you. Please Application select the application in which you would like to register for the mixi ad program Agree to terms Please agree to the mixi ad program terms and conditions prior to applying and cond. http://developer.mixi.co.jp/en/appli/policies/map/terms/ Screening 1. For a first-time applicant, the Company sends a document to name and address registered in Developer process Registration. The document may not be sent for a corporate developer who registered for a partner account. 2. The Company reviews the mixi App registered for this program. (maximum of 5 business days). 3. Upon approval, the advertisement distribution will begin and a notification will be sent by email. If the application is not approved, the applicant will also be notified by email. Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 7
  • 9. mixi Payment Program (mPP) Summary ○ mPP Payment Service ● PCs ● Feature Phones ● Smartphones (web-based) ● Native App - Android ● Native App - iOS ○ mPP Incentives ○ mPP Process ○ Submit Application to mixi ○ Submit forms to mixi ○ Screening process ○ Develop and test on application ○ Launch Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 9
  • 10. mixi Payment Program (mPP) mPP Payment Scheme (PC, Feature Phone, Smartphone, Android) Transactions Fees Payment based on # of points used in application 10.5% 11 75 JPY JPY 71.4% Application Provider Mobile Carriers and others 105 100 Purchase Points JPY pts Supply Points Use Points User 100 pts Platform Payment Method for Points PC ①Credit Card, ②WebMoney, ③Payment through cell phone Feature Phone ①Payment through cell phone, ②WebMoney (only for NTT Docomo) Smartphone ①Credit Card, ②WebMoney Android SDK ①Credit Card ,②Google Checkout Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 10
  • 11. mixi Payment Program (mPP) Discount Program based on DAU and In-app purchase rate (PC, Feature Phone, Smartphone) Average DAU In-app purchase rate 5,000 - 9,999 10,000-19,999 >20,000 PC Discount Program 8%-10% 1% 2% 3% 10%-15% 2% 2% 3% >15% 3% 3% 3% Average DAU Feature In-app purchase rate 40,000 - 99,999 100,000 - 199,999 >200,000 Phone Discount Program 8%-10% 1% 2% 3% 10%-15% 2% 2% 3% >15% 3% 3% 3% Average DAU In-app purchase rate 20,000 -49,000 50,000 - 99,999 >100,000 Smartphone 8%-10% 1% 2% 3% Discount Program 10%-15% 2% 2% 3% >15% 3% 3% 3% In-app purchase rate is calculated by (in app purchase MAU / MAU) Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 11
  • 12. mixi Payment Program (mPP) mPP Payment Scheme (iOS) Fees Revenue Share (contract) 30% 31.5 JPY ? ? Application Provider Apple Payment Platform Social Graph mixi User ○ Apple requires developers to use the iOS payment system (30%) therefore the remaining 70% is split between mixi and the developer ○ The revenue share percentage is agreed upon and documented in a contract Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 12
  • 13. mixi Payment Program (mPP) mPP Process Submit Application Agree to the terms and conditions, then sign and submit application form to mixi. to mixi Submit Fill out forms to describe the application and the types of capabilities it will have and send the forms forms to to mpp_info@mixi.co.jp mixi Screening process mixi will review the application. A notification of approval or rejection will be sent via email. Develop and Develop and test the payment system. If the application is already on the mixi platform, use a test application. The application must be approved by mixi before it is launched, therefore a test approval test on request must be submitted. application Once approved by mixi, the payment system can be launched in the application and appropriate Launch payments will be made to the application provider. Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 13
  • 15. UU bonus UU Bonus (incentives for apps that do not use mPP) PC ○ Only devices that do not have in-app purchases can qualify for this program Feature Phone ○ Only applications that are categorized as one of the following can qualify ○ Entertainment ○ Horoscopes and Smartphone (web based, native) Assessments ○ Communication ○ Learning ○ Tools Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 15
  • 17. Payment Method mixi Payment Rules x JPY (x JPY – 420 JPY) remitted Payment 10th 1st month 2nd month 3rd month ○ The statement is calculated at the end of each month (x JPY) and the payment is made on the 10th of the 2nd month after the calculation month ○ A remittance fee of 420 JPY is deducted from the payment amount ○ In the event the remittance could not be completed due to a lack of or inaccuracy of information provided by the application developer, mixi will not refund the 420 JPY remittance cost and will charge an additional 840 JPY for cancellation fees • 2,000 JPY/month required for remittance (xJPY > 2000 JPY for payment)  Any monthly payments that do not surpass 2,000 JPY are deferred to the next  Payment is then made when the aggregate of each month surpasses 2,000 JPY Strictly confidential Copyright 2011 © mixi,Inc. All right reserved. 17