Usen to spin off money-losing GyaO

Broadband portal to become separate co.

TOKYO — Media conglom Usen has decided to spin off broadband portal GyaO as a separate company.

GyaO will launch in the latter part of October as a wholly owned Usen subsid. The object to is make GyaO accept responsibility for its own corporate destiny and keep a lid on its expenses.

Launched in April 2005, GyaO is a pioneering portal site offering free video content. It tries to recoup by selling ads — the same business model as commercial TV.

As of Sept. 30 GyaO had 20.8 million registered users, making it the biggest site of its type in Japan. It has also been beefing up its contents; in July it launched the AsiNavi subscription site that provides dramas, pics, concerts and TV variety shows, as well as entertainment news and info from Asia.

But this and other attempts to stimulate visitor traffic so far have done little to stanch the flow of red ink, as ad revenue has yet to cover content acquisition expenses.

In the fiscal year ending in August, Usen recorded a $539 million consolidated pretax loss, making the revamping of GyaO an even more urgent priority.

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