Bad news for Amazon over the weekend. The Tokyo Regional Taxation Bureau slapped Amazon’s affiliated unit “Amazon.com International Sales” with a $119 million tax bill. Japanese newspaper Asahi Shimbun reported yesterday [JP], the subsidiary is accused of failing to report income in Japan between 2003 and 2005.

Japanese tax authorities started making these allegations as early as 2007 but now seem ready to pull out the hammer. The way Amazon operated so far is that every time Japanese customers buy something from Amazon’s Japanese website, they legally make contracts of purchase with Amazon offices in the US. The problem for the Japanese taxation bureau: These sales were booked and taxed in the US, even though Amazon operates two companies in Japan, Amazon Japan and Amazon Japan Logistics. (Click here for more background on Amazon’s position in Japan.)

Reportedly, income of several hundred of millions of dollars wasn’t taxed in Japan under the U.S.-Japan tax treaty, as demanded by local tax authorities now. Amazon is currently in talks with authorities to invalidate the accusations.

The term “e-commerce” still lacks a universally valid definition, but even if you just bundle B2B and B2C transactions under it, it’s a multi-trillion dollar business globally. Last year, Nielsen found [PDF] 86% of the global web population made an online purchase already (North America: 92%). For the US alone, B2C sales are expected to grow from $130 billion this year to over $200 billion by 2013 (excluding travel).

In North America, Amazon is the 800-pound gorilla in the B2C arena - by very, very far. After the US launch in 1995, the company quickly established separate websites in Canada, the United Kingdom, Germany, France, China, and Japan. But although Amazon wins in Canada and Europe, things are not going as well in Asia. In China (where Amazon started offering a localized site in 2004), it practically gets destroyed by local player Taobao [CN]. Traffic-wise, Amazon gets dwarfed by a local e-commerce site in Japan, too: Rakuten.

Amazon is active in Japan for a good reason: In its last report [JP, PDF], the Japanese government said the country’s online B2C sector grew by 21.7% to over $55 billion in 2007 on a year-on-year basis. (Note: Statistics from different sources can vary widely because of totally different methods of measurement. The Japanese numbers, for examples, do include travel.)

Now it seems Rakuten wants to take its global plans (laid out numerous times in the past) to the next level, with CEO Hiroshi Mikitani saying just this weekend he wants to see his company generating $1 million in daily sales outside Japan by the end of this year.

This short case study tries to shed light on Rakuten’s background and key success factors, why they win against Amazon in Japan and what efforts they make to go global.

If you’re like me, you always try to avoid storing or backing up files, even those that are important to you. It’s too boring, time-consuming and cumbersome to remember doing it regularly.

This is where a new service called quanp (short for “quantum paper” and pronounced “kwan-puh”), launched today in beta, comes in. Developed by Japanese technology giant Ricoh, quanp wants to become your online center for collecting and organizing all of your personal “digital life memories”.

Dropbox and many other services basically do the same, but the idea behind quanp is to turn storing and sharing pictures, music, videos, PDFs etc. online into a more enjoyable experience by making it more “visual”. The service is currently free and as Ricoh says, mainly aimed at US residents for the time being (in Japan, quanp is available in free and paid versions since March). The US version is being managed by a Ricoh office based out of Cupertino in California.

LinkedIn has bolstered its position as America’s leading business social network by the month lately, with Germany-based Xing as the only company regarding itself a worthy competitor in the last few years. But now those days seem to be over - in the US and China, at least.

Today German newspaper Hamburger Abendblatt published an interview [GER] with Xing CEO Stefan Groß-Selbeck (who recently replaced founder Lars Hinrichs), and he revealed a couple of interesting tidbits of information about the future direction of his company (find a horrible, Google-translated version of the full interview in English here).

Talking in broad strokes, Groß-Selbeck said 3.5 million of the 7.5 million Xing members are based out of Germany, Austria and German-speaking Switzerland. This isn’t really that surprising, given the background of the company. But the interview also marks the first time a Xing representative publicly (albeit indirectly) admitted losing in the USA and China.

It surely didn’t escape anyone’s attention Twitter is on track to becoming a mass phenomenon globally. The service is also growing nicely in Japan where it has been embraced by the geek community in particular (Japanese is the only alternative language Twitter is available in until today).

And today a small group of those Japanese geeks, members of the so-called Koress Project, have announced the development of the Akiduki Pulse box, a device that automatically posts your heart rate to Twitter [JP].

Video and more info after the break.

Colabolo is an Adobe Air app that soft-launched a few days ago and wants to simplify the way tasks in a team are assigned, managed and resolved. Available in English and Japanese, the app (currently in beta) is offered by Tokyo-based ImaHima. By combining the ease of use of email with the structure of project management solutions, Colabolo intends to help handling tasks that require team work such as sales leads, approval requests, document reviews, support requests, etc.

After installing the client (system requirements), Colabolo starts with an almost spartan interface that indeed looks like that of an email client. User can create a new task (called “issue”) in just a few seconds: Click on the “New Issue” button, name and describe the task, classify it by type, assign who is responsible and you’re done. All tasks can then be tracked (and filtered) at a glance in an inbox-like grid at the top of the screen. This is also where all updates made by team members are automatically sent to.

But Colabolo isn’t only for the project leader. All issues can be scheduled, commented on and discussed in real-time by added team members. Files can be shared with drag-and drop. And Colabolo can also be integrated into existing email accounts, essentially turning it into a help desk system when dealing with external customers.

Releasing odors in movie theaters to enhance the viewing experience is an idea that’s been around for decades now. Now NTT Communications, a wholly-owned subsidiary of Japan’s telecommunications behemoth NTT, takes the idea to another level: The company today announced the development of a “fragrance communication” system that makes it possible to send smells over the web.

NTT Communications is currently recruiting monitors for their so-called i-Aroma service, which will go through a test run from mid-July to the end of August. i-Aroma is based on a USB device (15cm tall) that contains six base oils, which are mixed and vaporized depending on the online commands the diffuser receives. As a result, a number of different fragrances will waft from the machine.

Bad news for Facebook from Germany today. Facebook has had issues with Berlin-based social network StudiVZ (”student directory” in German) for years before deciding last summer to finally sue their German clone in the US. In November, Facebook filed another suit [PDF], this time in Germany. The allegation in both cases: Intellectual property theft, with Facebook saying StudiVZ infringes on their site’s design, features and services. In addition, StudiVZ is accused of having stolen PHP source code from Facebook.

Anyone who spends more than 2 minutes on StudiVZ must come to the conclusion that the site is a total knock-off of the American original. It’s even rumored that several lines of very early StudiVZ code contained the word “Fakebook” and as a German, I can say StudiVZ is more or less a translated duplicate. But today the County Court in Cologne (where the suit was filed in November) decided against Facebook. And the judges were pretty harsh in their verdict.

It seems that even in this downturn, there is still room for tech IPOs, at least in Japan. Cookpad [JP], the nation’s biggest site for sharing recipes, today announced it will be listed in the “Mothers” section of the Tokyo Stock Exchange on July 17.

Cookpad was launched as early as 1997 by the Tokyo-based company of the same name. The Japanese-only site now offers nearly 560,000 different recipes (submitted by users) and saw a whopping 351 million page views last month, generated by 6.8 million unique visitors. By way of comparison, one of America’s leading recipe sites, Allrecipes.com, claims it has almost double that number, but Google Trends shows there isn’t too much of difference.

The second day of the Geeks on a Plane geeky spree in Japan was completely filled with (mostly) insightful presentations, panels and pitches from newly launched Japanese start-ups (here is an overview of day one). The Startonomics Tokyo event was held Tuesday at the offices of KDDI Web Communications (one of Japan’s biggest hosting providers) in downtown Tokyo.

What follows is a brief overview of what you missed during that day, followed by a quick summary (and full video) of an on-stage interview with Kenji Kasahara. Kasahara is CEO of Mixi, Japan’s biggest social network, and openly spoke about his success story (the interview was done on the third and final day of GoaP’s Tokyo leg).

But first, here is a summary of all the presentations and panels that the GeeksOnAPlane witnessed during Startonomics Tokyo.

The GeeksOnAPlane Asia tour kicked off on Monday in Tokyo, with the group of mostly US-based geeks leaving today for Beijing. Former TechCrunch employee Mark Hendrickson already shared his views on the Japanese tech scene from an American perspective, giving me room to summarize (almost) all presentations the GoaP group witnessed in Tokyo (I myself am a Japan-based writer for the TechCrunch network).

This means there is a lot of substantial stuff to cover, which is why I will do a two-part posting on the GoaP Tokyo leg (the second piece follows tomorrow). First on the list is Tokyo 2.0, a monthly web industry event that combines networking with a number of presentations and lightning talks (and regularly attracts an audience of about 200 people).

This time, a total of four presentations tried to shed light on the question of how language and the web can be interconnected and how this helps in the evolution of the web. Here is a quick summary of all the presentations held during Tokyo 2.0 this Monday.

These are some very early prototypes Japan’s No. 1 telecommunications company NTT recently showcased during the JPCA Show 2009 in Tokyo, but they are pretty cool to look at and may show a glimpse of the near future. The basic idea is to one day be able to offer cell phones featuring an interface for attachable and replaceable hardware add-ons.

The company’s Institute for Advanced Technology is researching on how to transform a conventional cell phone into a “physical”, two-piece flute, for example. Users would then attach the upper part of a flute to their cell phone and press its keyboard buttons to make music. Songs can even be shared wirelessly with other users.

Have you ever been annoyed by the fact that Wikipedia has a wealth of textual information but no videos and hardly any pictures? Take the Wikipedia article for Sony’s Rolly, for example, where the device is depicted as “an egg-shaped digital robotic music player.” If you have never seen a Rolly before, this cryptic description won’t help much. After reading about it in Wikipedia, you’ll then need to look it up on YouTube or Google Image Search to see what it actually looks like.

This is where a new service called Navify comes in. Launched in public beta today, Navify intends to enrich Wikipedia by adding pictures, videos and user comments to each article. And it actually works pretty well. Look up “Sony Rolly” using Navify and you not only get the original Wikipedia text but also hundreds of related pictures and videos (pulled in from Flickr and YouTube) by clicking on the tabs Navify puts on top of each article. Look up “Pulp Fiction” and the service retrieves the Wikipedia article itself plus screenshots, covers, posters and trailers from the movie. You get the picture.

The Infinity Ventures Summit (IVS) in Sapporo/Japan, one of Asia’s most important web industry events, is a wrap, and we were there to witness a total of 12 startups presenting at the launch pad. The judges awarded 3D model maker MotionPortrait with the top prize. Graph sharing service Vizoo [this and many of the following links are in Japanese], recommendation engine Deqwas, photo management service Cerevo and virtual world Ameba Pigg came in second to fifth. You can read about all winners here.

Here is a quick rundown of the pitches delivered by the seven other companies (some of these were way more promising than the winners).

I am currently in Sapporo/Japan, attending the Infinity Ventures Summit (IVS) [this and many of the following links are in Japanese], a two-day event that takes place twice a year. Organizing VC company Infinity Venture Partners regularly not only attracts the cream of the crop of the domestic web industry but also a number of high-profile attendees from abroad. This time, these include RockYou CTO and founder Jia Shen (whose company is currently expanding to Japan), Admob CEO Omar Hamoui, (who today announced Admob’s foray into the Japanese market), Korean web entrepreneur Chang Kim (who recently sold his Seoul-based company to Google and writes a highly recommended English blog about Korea’s web scene) and Casee CEO Xin Ye (Casee is China’s answer to Admob).

The program also includes a launch pad, which just took place and gave a total of 12 Japanese start-ups the chance to present their wares onstage to a panel of judges and a crowd of about 300 people. But the word “Launch Pad” is a slight misnomer as IVS serves as a venue also for established start-ups to get their products in front of as many influential bloggers, VCs and entrepreneurs as possible. So unlike TechCrunch50, for example, the IVS concept doesn’t require companies to actually start businesses here.

In the end, a service called MotionPortrait won the title of best startup of the IVS Launch Pad.

You can read my thumbnail sketch of each of the five award-winning contenders below, along with my personal impressions. Please note some of the companies have yet to launch homepages in English.

Many companies, especially those in the consumer brand and Internet space, use widgets as part of their online marketing efforts. After all, those tiny, standalone apps that can be installed on any web page are inherently viral, aimed at spreading quickly across blogs, social networks and other places. A successful widget campaign can not only help get in touch with end consumers, but also saves a lot of advertising dollars and strengthens brand recognition sustainably. Even the FBI has started offering widgets to hunt down criminals.

But widgets also have one major flaw: They tend to get old fast and eventually fall off people’s pages (who, for example, wants to see dancing Christmas elves in April?). Here is where a new “content-managed widget system”, dubbed Goldenrod, comes in. Developed by Centric, an LA-based interactive agency, Goldenrod is looking to make widget marketing long-term and strategic - by giving brands dynamic control over their widgets (and apps).

For a geek, living in Tokyo has many advantages. Being tempted to go check if infamous crap gadget vendor and USB specialist Thanko is for real, isn’t one of them. But I finally went to Akihabara, the world’s geek heaven in the center of Tokyo to find answers. And the rumors are true, Thanko does exist.

Thanko is a manufacturer that attaches a USB cable to everything. Drink warmer? Check. Humping dog? Check. Cigarette? Check. Mouse containing a floating duck? Check. So when we discovered they were a real company, we were flabbergasted.

Meeting24.tv is a new web conference system that lets up to 24 users simultaneously hold meetings online through an extra-simple UI. The service is offered by WIT, a Tokyo-based research lab (meeting.24 is available in both English and Japanese). Utagoe, the same Tokyo- (and San Jose)-based company that runs Utagoe Live 100 (FriendFeed for video streams), developed the streaming technology behind it.

Like Utagoe Live 100, meeting24.tv also has a similar minimalistic feel to it, which is supposed to make it easy for anyone to use - even those with little web experience. The service is based on the assumption that other online meeting solutions such as TokBox (which we covered three times), Cisco’s Webex, Polycom or Skype are just too complex.

The number of apps for the iPhone/iPod Touch is nearing the 30,000 mark but hardly any application takes advantage of the network effects that lie within the Apple ecosystem. Most developers simply ignore the fact that all iPhones and iPod Touches are interconnected globally and roll out stand-alone applications. This is one of the major reasons why the vast majority of fun apps lack stickiness and are easily forgotten after a few quick bursts.

But a Tokyo-based start-up called Genkii is building a unique app that has the potential to not only let a few iPhone users connect with each other, but thousands of them - at the same time or asynchronously. Sparkle is poised to become the first virtual world for the iPhone. What’s more, it’s being developed completely from scratch, exclusively as an MMO for the iPhone/iPod Touch.

Does Android dream of Sekai Camera? The answer is yes. The augmented reality app, which was unveiled for the first time during TechCrunch 50 last September, isn’t iPhone-only anymore. Sekai Camera is supposed to make it possible for phone users to tag objects and locations in the real world by using their camera phones.

Jump over to MobileCrunch to see two videos showing a live demo of Sekai Camera on an Android handset.

Sometimes it’s hard to remember which video you have seen, left a comment on, rated, or who recommended it to you. And it’s getting harder to cut the noise in the heavily crowded online video space (YouTube users alone are uploading 15 hours of new content every 60 seconds). This is where Mitter, a service provided by Tokyo-based Metacast comes in (the site is available in English).

Mitter wants to do for video what recently introduced Dutch startup Twones does for music. The service tracks viewing patterns over multiple video services and generates a social feed based on that information. And much like Twones, Mitter doesn’t make much sense without installing an add-on for Firefox or the Internet Explorer (there is also a browser-independent bookmarklet available). To date, the Mitter toolbar has been distributed 1.5 million times. It’s now being actively used by more than 150,000 people, mostly in Japan.

There are no official statistics available as how well the iPhone sells after Apple started offering it in the Japanese market. Now Softbank Mobile, one of Asia’s biggest tech companies and the exclusive carrier for the iPhone in Japan, thinks sales need a boost and decided to give away the hardware basically for free.

A total of 52 companies launched at last year’s TechCrunch50 conference. Five of them got jury selection prizes, there was one big winner and a very special crowd pleaser: Japan-based Tonchidot’s Sekai Camera, an iPhone app that presents tagged information in the form of a graphical layer over images in the iPhone camera.

Charismatic CEO Takahito Iguchi delivered a memorable demonstration, making the audience go crazy by fending off questions of TC50 judges such as Tim O’Reilly if Sekai Camera really works with the words “Join us!” or “We have a patent!”. The reason for the skepticism: Iguchi’s on-stage show mainly centered on a pre-produced video clip, not an actual product demo. This left people wondering if Sekai Camera isn’t just vaporware for almost half a year during which it seemed like nothing happened. But today I saw the app is real and working - on an iPhone.

On Monday, we covered an embarrassing pay-per-post campaign Google launched in Japan with the aim of boosting awareness of a new keyword hitlist box on the Google Japan top page. It now turns out the move, which was (to my knowledge) first brought to light by Japanese super bloggers Masato Kogure and Akky Akimoto, triggered a number of repercussions.

The aftermath in a nutshell: The campaign is now stopped, Google is embarrassed, apologizes and penalizes the Japanese site with a PageRank reduction.

Google is undoubtedly the dominant search engine globally, but in a few countries such as Korea (Naver), Russia (Yandex) or Japan, local competitors are winning. Especially Nippon, the country with the world’s third biggest Internet population (about 100 million people are online), still seems to be a tough nut to crack for Google.

Nielsen Japan reports that in October 2008, Yahoo Search saw a total of over 3.5 billion page views, while No. 2 Google trailed with 2.6 billion page views. According to a Comscore Japan ranking released in September 2008, Yahoo ruled the Japanese search engine market with a share of 51.2% (Google reached 39.0% in that month).

It’s not that Google isn’t trying. In recent months, the company rolled out a number of online ads, offline promotion campaigns and several Japan-only services (Picasa recently started offering QR codes for easy mobile access, for example). And today it came to light they are now paying bloggers to write nice things about Google - a marketing tool TechCrunch never really was a big fan of.