Japan's biggest trading company is diving into the information business with the purchase of a 17% stake in the Asian subsidiary of Guthy-Renker, an infomercial producer partly owned by Rupert Murdoch.
Nissho Iwai Group, which is expected to announce the $9-million investment today, wants to use the purchase to develop infomercials for Asian consumers. Despite Japan's fragile economic situation, Minoru Takagi, assistant manager of the 70-year-old Tokyo-based firm's media business department's satellite business section, said he believes the purchase is "advantageous."
Guthy-Renker is 37.5% owned by Murdoch's News Corp. It is based in Palm Desert but has its main production office in Santa Monica. Nissho Iwai also has links to Murdoch through a satellite TV venture.
Ten-year-old Guthy-Renker, which has about 150 employees worldwide and $350 million in annual revenue, is the nation's top infomercial producer. Among the products it's pitched: Victoria Principal's Principal Secret, the Fitness Flyer and Anthony Robbins' motivational items.
"This deal is not really about money but about their Rolodex, their assistance and clout. They make us front-seat players instead of back-seat players in Asia," said Greg Renker, a Guthy-Renker founder and co-president.
Nissho Iwai Group is affiliated with 272 companies in Japan and 210 outside the country. Its annual trading transactions total about $72 billion.
Guthy-Renker generated as much as $60 million in 1997 revenue in China, Japan, Australia and New Zealand alone. The Asia effort is part of a strategy for enhancing Nissho's other ventures--NIFTY (Japan's largest online service) and SkyPerfecTV, formed recently by the merger of Murdoch's JSkyB and Nissho's PerfecTV (Japan's first direct satellite broadcasting service).