"Employment Security" Reassurance Emphasizes Identity
Recognized as Key Subsidiary Overseeing Overseas Business
Protecting Southeast Asian Market Following Japan
The CEO of Line Yahoo recently made a surprise appearance at an online meeting of the Korean subsidiary, Line Plus, leading to assessments that the handling of Line Plus has emerged as a key issue in negotiations involving the sale of shares to Naver.
According to industry sources on the 16th, during the Line Plus online employee briefing held on the 14th, Takeshi Idezawa, CEO of Line Yahoo, made remarks assuring "the guarantee of employees' jobs." At the briefing, Eunjeong Lee, CEO of Line Plus, also attended and emphasized Line's identity. She stated, "We are Line employees, not Naver," adding, "We just use the services more due to a special relationship, but we are a separate company."
The fact that the Line Yahoo CEO sought to reassure employees and emphasized identity is interpreted as an effort to protect Line Plus in Korea, which oversees overseas operations. Line Plus, the Korean subsidiary, has subsidiaries operating mobile services or marketing in Taiwan, Thailand, Indonesia, the United States, and other countries. The messenger Line has about 100 million users in Japan, the largest number, but also approximately 55 million and 22 million users in Thailand and Taiwan respectively. In these regions, it is recognized as the representative messenger. From Line Yahoo's perspective, it means they cannot afford to lose not only the Japanese market but also the Southeast Asian market.
According to Line Plus's audit report, more than half of its revenue was generated overseas. From April 1, 2022, to March 31, 2023, Line Plus's revenue was recorded at 877.9 billion KRW. Among this, revenue generated in Taiwan was 236.6 billion KRW, and in Thailand, 121.1 billion KRW. Korea and other regions recorded 95.3 billion KRW and 13.7 billion KRW respectively.
Line Plus also holds an important position in the Japanese business. It provides advertising services through the messenger Line, mobile game services, and development outsourcing. Related parties with transactions such as revenue include Demae-can, Japan's number one delivery service, Line Pay, a mobile simple payment service, and Line Biz Plus, which provides fintech services. Additionally, revenue is generated from Line Fukuoka, which develops Line Family services, and Line Growth Technology, a service and operations specialized developer.
Based on remarks made at the online briefing, it has become clear that Line Yahoo recognizes Line Plus as a core subsidiary, which is expected to influence future negotiations between Naver and SoftBank.
However, at present, SoftBank holds a favorable position in terms of control rights. Line Plus's audit report specifies SoftBank as the ultimate controlling company. Line Plus is 100% owned by Z Intermediate Global, the intermediate holding company of Line Yahoo. A Holdings, jointly invested 50% each by Naver and SoftBank, holds about 65% of Line Yahoo's shares, and Line Yahoo controls Line Plus through the intermediate holding company.
Professor Yong-sik Hwang of Sejong University's Department of Business Administration advised, "Judging from the remarks at the Line Plus briefing, it does not seem that Line Yahoo will easily give up businesses outside Japan. It is most important for Naver to set the direction for overseas business, and it is also necessary to consider ways to increase the management premium in share negotiations with SoftBank by leveraging this."
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