Where's the door?

It’s open and poised to kick Takafumi Horie out into jail for a long time. For those of you who don’t know livedoor is a Tokyo based internet company that, like many internet companies, draws its revenue from mysterious places. Seriously, livedoor made the major international news, this week, when major allegations of securities and accounting fraud were brought against and some of the major players, including Horie, were arrested.

livedoor was originally founded as Livin’ on the Edge, a sort of internet consultancy by Horie and his friends while still in college. It later acquired a defunct ISP called livedoor and changed its name to reflect the merger.

Horie and his company made headlines last year when they tried a very non-Japanese style hostile takeover of Fuji Television, one of the largest media outlets in Japan. The takeover ultimately failed and left Horie, nicknamed Horiemon for his resemblance to cartoon character Doraemon, in a bad position. livedoor had been steadily growing due to mergers and acquisitions, they even tried to apply for their own baseball team in early 2004. Unlike American business, from where Horie probably learned his techniques, this sort of operating style doesn’t fly well in Japan. It ultimately turned into the company’s downfall when the allegations and raids on several livedoor locations, Horie's home, and the homes of other livedoor and subsidiary executives were made and investors rushed to dump livedoor stock which dropped to a 52 week low and caused such heavy simultaneous trading that the Tokyo Stock Exchange needed to be stopped to prevent a system crash.

What happens now? livedoor employs around 1000 employees in the fashionable Roppongi Hills district of Tokyo. It was a great stock in Japan until recently and the country’s premier internet companies with a number of international holdings. This could be the end of the company, and those people would be start to be updating their resumes. Horie, himself, is awaiting arraignment and has resigned as CEO.


Wisdom of the Day: All you need to make a subway trip into a vacation is three empty seats and a sufficiently fruity drink.