I think the majority opinion among the policy experts on mobile phone in Japan is negative precisely because the users are interested in advanced features that are not wanted in anywhere else in the world. It is a factor that prevents domestic handset companies from economies of scale.

I personally consider it to be an interesting cautionary tale of the other side of the user-driven innovation that so many people talk about these days. It could be a curse, or at least a burden to have innovative users.

At the core of this initiative is the idea that having their own search ad system would give them better revenue. At the background on this is the scale economy. I think there is a natural monopoly tendency for contexual ads like AdSense - there is a positive network externality. The more outlet (ad space) you have, the more advertisers you can attract. The more advertisers you have, the more likely it is for niche web page to get some fitting ads, increasing the chance that it will generate some ad revenue for the owner of the web page, and sales or brand recognition for the advertisers.