Livedoor Founder Sentenced to 2 1/2 Years

Japanese intenet entrepreneur Takafumi Horie was sentenced to two and a half year in prison by a Japanese magistrate today. Horie, founder of Livedoor, a well known Japanese dotcom startup, was arrested last year for stock improprieties.

Horie's attorney claims such rulings will stifle the entrepreneurial spirit in Japan, the Associated Press reported.

Horie tumbled from stardom when prosecutors raided his company last year and then arrested him. He was kept incarcerated for three months, but he did not sign a confession as most suspects tend to do in Japan, often to win lighter sentences.

Some Livedoor shareholders were pleased by the verdict, saying it recognized the financial damages they suffered because of the fraudulent accounting.

Livedoor, which operated an Internet portal and offered Web-related services, drew a large number of individual investors, partly because of Horie's fame. Those investors, many of them amateurs at the stock market, took big losses when Livedoor shares nose-dived after Horie's arrest and were later delisted.

About 3,600 individual investors have sued Horie and Livedoor for damages, saying they were duped to buy falsely valued shares.

About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.