• by Steve McClellan  @mp_mcclellan, December 27, 2012

Tokyo-based ad holding company Dentsu Inc. has formed a strategic alliance with Digital Garage, an early investor in Twitter, the companies have confirmed. As part of the agreement, Dentsu will acquire 7% of the outstanding common shares of Digital Garage for approximately $31 million.

Digital Garage, also based in Tokyo, is a leading Japanese digital company with interests in portals, e-commerce and mobile communications. The company works with a number of U.S.-based firms. It has partnerships with both Twitter and LinkedIn, under which it has customized Japanese versions of those social media networks.

Earlier this year, it acquired Photozou from Zynga and the right to operate the photo-sharing service as Zynga Japan.

The companies said their alliance would focus on the development of digital marketing and business intelligence services. The plan is to utilize the latest marketing technology in Japan, North America and other markets for commercialization throughout Asia.

“Since the Digital Garage Group holds a significant amount of data through the management of Internet media and provision of e-commerce settlement platforms, and Dentsu offers a huge variety of solutions in the digital domain, their strengths are complementary,” the companies stated.

Dentsu, which is in the process of acquiring London-based Aegis Group, said it expects to complete the purchase of its 7% stake in Digital Garage in January.

In early December, Digital Garage struck an accord with San Francisco-based Kiip Inc. to sell ads and recruit app developers for Kiip’s smartphone advertising and rewards platform in Japan.