Now that it is open season on Livedoor, everybody knows that its president was ruthless and ambitious. But just how ambitious, wonders weekly AERA magazine, which claims that Takafumi Horie wanted Junichiro Koizumi’s job.
The 33-year-old IT entrepreneur had never even entered a voting booth until he decided to campaign in last September’s general election, says AERA.
But he jumped at the chance when Liberal Democratic Party secretary general, Tsutomu Takebe suggested that the experience of running in the campaign would open up a new world of possibilities.
Horie decided to run as an “independent” candidate but with the intention of siding with the LDP. He believed he would prove more popular than the man widely tipped as Koizumi’s successor, Shinzo Abe, the party’s chief cabinet secretary.
“Horie knew that Livedoor could not beat Yahoo! Japan in the portal site spectrum,” a Livedoor executive officer said at the end of last year. “But he believed that there was a post opening as deputy to Koizumi.
If elected, Horie thought he could slide in and take the prime minister’s post.”
When Horie found out that he had lost narrowly to veteran politician Shizuka Kamei in his hometown of Hiroshima, he shifted his interest and submerged himself in space travel. He told AERA magazine in an interview last year that he found it “boring” to discuss the state of Livedoor’s business.
“Small planets are more interesting,” Horie reportedly said. “We can build a hotel on one of them…and travel back and forth between the planet and Earth.”
Horie was always an odd person, says AERA, but he increasingly appeared to be losing his sanity as he struggled to find a niche that could boost his popularity. He may have been driven by his rivalry with Rakuten President Hiroshi Mikitani or Yoshiaki Murakami of Murakami Fund.
Horie partied hard almost every night with his young staff and ended up drifting away from his core business operation. He was found staggering and suffering from a serious hangover when he visited Fuji Television Co. at the end of last year.
However, he never let go of the decision making rights of his presidential post or passed the responsibility for hiring staff and purchasing miscellaneous goods to other junior members of staff.
Behind the curtains, workers and executives of Livedoor whispered about the need to train and educate their boss properly, because he lacked the devotion and seriousness of a professional. But the fact is that Horie would never look for advice from anyone except for the popular television fortune-teller Kazuko Hosoki and songwriter Yasushi Akimoto.
Incidentally, Akimoto turns out to have been a major Livedoor stockholder, according to the magazine, with 1.5 million shares, which is more than double Horie’s share.
Many executives knew that the biggest risk to the company’s business and reputation was the president himself. AERA even goes as far as to say Horie resembles Aum Shinrikyo guru and convicted deathrow inmate Shoko Asahara. “Horie made himself into god,” the magazine quotes a Livedoor executive as saying.
But far from being just a lone loose canon, Horie was given a leg-up by the powerful, says the magazine. It was the deregulation in the 1990s that helped create the rich complacent businessman he became from the internet “otaku” he was.
When the Tokyo stock market opened the Mothers market in November 1999 for entrepreneurs and firms in the red, without setting any standard for net capital or profit, the seeds of the Horie monster were sown. Livedoor grew in just four years to a 4.7 billion-yen firm. The company acquired nearly 60 companies through stock deals, a practice newly adopted into the Japanese Commercial Code in only 1999.
It was Keidanren (Japan Business Federation) that demanded the deregulation of this Commercial Code and the LDP put its shoulder behind the changes, but Horie gained most advantage from it.
During the battle with Fuji Television, Horie is said to have secretly met Hiroshi Okuda, Keidanren chairman and Toyota Motors Co. president, to ask him to mediate a deal between himself and Hisashi Hieda of Fuji Television. Hieda politely refused Okuda’s intervention. But, for Horie, this was a way into Japan’s conservative business circle Keidanren.
Okuda is later quoted as saying that welcoming Livedoor into Keidanren was one of the biggest mistakes he ever made.
Horie focused so much on expanding his company through takeovers that he forgot to nurture its core business, AERA says, making profits by buying failing businesses cheap and selling shares via stock deals. Unlike Bill Gates of Microsoft Corp. or Steve Jobs of Apple Computer, Horie and his company had no technical expertise or products.
Even if the men in suits had not come calling on Horie in January, however, the writing may have been on the wall. Last year, Livedoor already had its clients canceling subscriptions because they could see the company was going downhill.