Merging Yahoo with Japan’s Line messaging app . . .
On Monday, SoftBank Group affiliate, Z Holdings, announced its intention to invest US$4.7B in the popular Japanese messaging app Line. Line is a Tokyo-based subsidiary of Naver Corporation, the company behind South Korea’s most popular internet search engine. Globally, Line’s market share is marginal compared to the big-four U.S.-based tech giants, Google, Amazon, Facebook, and Apple. Still, in East and Southeast Asia, Line is one of, and in some countries the, most popular messaging apps.
Creating a ‘super-app' . . .
In purchasing Line, SoftBank hopes to create a ‘super app’ similar to China-based WeChat. SoftBank, which owns Yahoo Japan, intends to streamline overlapping services such as online news and entertainment, integrate financial services such as SoftBank’s mobile payment app PayPay, and create online advertising synergies. Yahoo is incredibly popular in Japan. Whether it’s checking the weather (Yahoo Weather), answering questions online (Yahoo Answers) or bidding on items (Yahoo Auctions), Yahoo Japan is the go-to internet resource. SoftBank hopes that by integrating Line into its already strong market presence in Japan, it can increase market share both at home and abroad.
Competing against US-based tech giants . . .
If the new super app is successful, Line may become a competitive threat to both U.S. tech giants and China’s WeChat. Until 2020, China’s WeChat was making headway into the North American market. But former-president Donald Trump’s banning of the app created a void in Asia-focused messaging apps in the North American market. Line could help fill this void. According to Yahoo Japan’s president, Kawabe Kentaro, the newly-merged entity is superior to U.S. tech giants in terms of its variety of business activities. He believes the merged company is well placed to lead the world as an Asia-based, artificial intelligence (AI) tech company.
- The Japan Times: Yahoo Japan operator merges with Line to take on foreign tech giants
- NHK World-Japan: Yahoo Japan, Line merge to form tech giant
- Nikkei Asia: SoftBank unit to invest $4.7bn in Yahoo-Line integration