Google came in thinking that they can implement US/Western practices which allowed them to be successful overseas. This unfortunately does not work.
Japan's market is very unique and very self sustaining. Due to the population and the way the people behave. For example Yahoo Auctions is still the number 1 auction website in the world whereas Ebay has never penetrated the market. And Ebay also has moved into the form of a marketplace over the last few years. Yahoo Auctions has largely not changed over the years.
> Yahoo! succeeds in Japan and Taiwan through its nearly two-decade-old partnership with Japanese SoftBank and its 2007 purchase of Wretch, a Taiwanese social networking site.
See the bottom table in http://ir.yahoo.co.jp/en/holder/status.html
Which is why Japan is now behind Korea in electronics.