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2006.07.03
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Digital Garage Establishes CGM Marketing Jointly with Dentsu, cci and ADK

Launching new marketing business in Web 2.0 era utilizing CGM
Making investment in and fostering the business of CGM-related companies and technologies


On August 4, Digital Garage, Inc. (JASDAQ: 4819, Head office: Shibuya-ku, Tokyo, President & Group CEO: Kaoru Hayashi, henceforth DG) will establish CGM Marketing, Inc., a company that will develop new marketing techniques and strategies by analyzing and utilizing media such as blogs, in which general consumers provide information through the Internet (Consumer Generated Media, henceforth CGM). The new company will be co-founded by DG together with Dentsu Inc. (TSE First Section: 4324, Head office: Minato-ku, Tokyo, Chairman: Tateo Mataki, henceforth Dentsu), Cyber Communications Inc. (TSE Mothers: 4788, President and CEO: Hideyuki Nagasawa, henceforth cci), and ASATSU-DK INC. (TSE First Section: 9747, Head office: Chuo-ku, Tokyo, President & CEO: Koichiro Naganuma, henceforth ADK).

It has been a while since the concept of Web 2.0, a new form of Internet system and service linkage, was popularized. CGM, as represented by blogs, is now a key component of Web 2.0 and comprises a significant portion of Internet content. Currently the number of people who have registered for blogging services, a representative CGM medium, totals 8.68 million and SNS (Social Networking Services) subscribers total 7.16 million (as of the end of March 2006, according to the Ministry of Internal Affairs and Communications). These numbers continue to rapidly increase. Accordingly, the frequency of site visits and the average CGM logon time per person are estimated to greatly surpass corporate sites (according to the Japan Advertisers Association). In this phase of transition, CGM content (information and word-of-mouth knowledge provided by individuals) is playing an increasingly important role in the lives of consumers.

In response to transitions in the Web 2.0 era, the new company, CGM Marketing, will invest in and foster CGM-related companies and technologies, while developing new products and services that will take the lead in marketing in the era of Web 2.0. CGM Marketing will organically merge the CGM technologies and expertise accumulated by DG, the advertising and marketing resources amassed by Dentsu and ADK, both of which are leading business corporations in the field and the resources held by cci, a media representative with state-of-the-art Internet media know-how.

In concrete terms, the new company will construct a CGM ad distribution network utilizing the search technology of Technorati Japan, Inc. (Head office: Shibuya-ku, Tokyo), a subsidiary of DG providing the largest scale of blog search services in Japan. The company will also enhance partnerships with other entities such as "kakaku.com", the price comparison site managed by a DG Group company, "4travel.jp" , a word-of-mouth travel information site, "tabelog.com", a gourmet word-of-mouth information site, Six Apart KK (Head office: Minato-ku, Tokyo, CEO: Nobuhiro Seki) and other major CGM-related companies outside the Group, in order to make proposals for new forms of Internet marketing.

Furthermore, the new company will aggressively promote its new products and services that have proven successful in Japan in overseas markets such as the U.S. and China by fully utilizing the groups' global networks maintained by DG, Dentsu and ADK.

Outline of the New Company
  Company Name CGM Marketing, Inc.
Location 2-43-15, Tomigaya, Shibuya-ku, Tokyo
Representative President & CEO: Kaoru Hayashi
Establishment August 4, 2006
Capital 200 million yen
Ratio of Capital Contribution: Digital Garage, Inc. 51%
  Dentsu Inc. 17%
  cyber communications inc. 17%
  ASATSU-DK INC. 15%
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