LEAD: Usen mulls business tie-up with Livedoor+
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[March 14, 2006]

LEAD: Usen mulls business tie-up with Livedoor+

(Japan Economic Newswire Via Thomson Dialog NewsEdge)TOKYO, March 15_(Kyodo) _ (EDS: ADDING INFO)

Usen Corp., Japan's major cable broadcaster, is negotiating with scandal-tainted Livedoor Co. for a business tie-up in the Internet services business, sources close to the talks said Tuesday, a day after the Tokyo Stock Exchange decided to delist Livedoor shares.



Usen is also moving to purchase Livedoor shares held by Fuji Television Network Inc. from the broadcaster, they added. Japan's leading TV broadcaster is now the second-largest shareholder in the Internet and financial services firm after its founder Takafumi Horie, who has been charged with securities law violations.

Usen, which also operates karaoke rooms, has been expanding Net-based services using fiber-optic cables in recent years. The number of people subscribing to its "Gyao" free TV program broadcasting services through the Internet has already reached 8 million, although the TV service started in full swing only last year.



Usen is expected to seek to strengthen its operating base by cooperating with Livedoor, the operator of an Internet portal popular especially with young people.

The combined sales of Usen and Livedoor last year surpassed those of two giants in the Japanese Internet Industry -- Rakuten Inc. and Yahoo Japan Corp.

Livedoor is apparently facing difficulty raising new capital and hammering out a business growth strategy as the Tokyo bourse decided to remove its shares from the Mothers market for start-up companies.

Fuji TV earlier considered supporting Livedoor's restructuring but seems to have found only limited merits in helping the Internet firm, whose share price plunged following the arrests of Horie and others, according to the sources.

Incurring more than 30 billion yen in unrealized losses from its Livedoor shareholdings, Fuji TV is set to file a damages suit against Livedoor, the sources said.

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