The Internet is helping Japanese women break out of the restrictions they have historically encountered in Japan's male-dominated culture.

Japanese women continue to have a notable impact on the development of Japan's business-to-consumer (B2C) online market. According to A.C. Nielsen, Japanese women comprised 37 percent of Japan's online population as of March 2000. Leading Internet service providers, including So-Net and AOL Japan, are reporting new subscriber rates of 40 percent or more in the first quarter 2000.

And the Ministry of International Trade and Industry estimates that Japanese women may approach fifty percent of the online population by 2003. This trend of women's increasing online presence has continued to build momentum since early 1999.

Now, in the first quarter of year 2000, Japanese women are not only making their presence felt in terms of Internet usage, but they are also stepping into the arena of the B2C online marketplace. Women are establishing and heading up their own "pure-plays," the online businesses that exist primarily in the virtual world of the Internet. (Yahoo and Amazon.com are examples of pure plays in the United States.)

The basic idea behind these virtual entities is to attract visitors to the site and build a critical mass of users. This is called an "online community." The bigger the online community, the "stickier" the site is, and the more attractive it becomes to companies seeking to advertise online. A site with a large community of online users can command significant advertising revenues that will attract investors, enable an initial public offering, or a buy-out offer by a larger Internet-related firm.

The first noteworthy feature of these sites is that they are not insignificant, grass-roots organizations as might be expected. Many are backed by large, traditional Japanese companies, such as the general trading companies. Sites in this category include Excite Women, which is backed by Itochu, Mitsubishi's J-Women.com, Toshiba's Womenjapan.com, and Mitsui's Living Ladies Community. These Internet start-ups require special attention because of their brand-name sponsors.

Other sites are backed by less traditional or foreign companies, but firms with a significant interest in the Internet, such as Sony's Lady A GoGo, or Coolgirls, which is sponsored by Microsoft and AOL, for example, and eSampo, which is sponsored by Avon and Kodak. At least one, Soho Inc., is an incubator started by the government itself, the Ministry of International Trade and Industry.

Not all of the sites are pure plays, but many are online communities that are likely to follow an Internet business cycle common in the United States. That cycle consists of five phases:

1. driving traffic to the site to attract advertising revenue
2. enabling the site for eCommerce activities (such as an online shopping mall)
3. generating cash
4. driving more traffic to the site to build the site brand
5. attaining profitability.

(Mail & Chat and Gala are exceptions: corporations pay these site administrators for access to the consumer data generated on the sites.)

Half a dozen of these sites are now entering the second phase of the Internet business cycle. Excite Women, @Woman, J-Women, Mamagenki, and Lady A Gogo are all in the process of launching online shopping corners or malls that would enable their members to engage in women-oriented eCommerce. Living Ladies Community, Career-Mam, and Coolgirls established shopping capabilities last year. A half dozen U.S. women's sites have already passed this phase. Indeed, they are veterans compared to their Japanese counterparts. But the U.S. sites have not reached sustained profitability yet, as a general matter.

Only a few of the Japanese women's sites will survive as long as it takes to become profitable, but the Japanese sites have a distinct advantage over their American counterparts. They have studied the American business models, are watching as some of the U.S. women's sites face potentially insurmountable challenges, and are learning fast so they can catch up quickly. The Japanese women's sites have gained considerable momentum, so it may not be long before they achieve parity with their U.S. counterparts.