Demonstrating the strength of its massively popular Line messaging apps and services, NHN Japan — the Japanese arm of Korean search giant Naver — announced today it is to split gaming and Internet services businesses, spinning off its messaging, search and Web portals into a new company.
NHN Japan says that smartphone and PC game development will now be handled by Hangame Corporation, which will continue to build on its Line Game brand, strengthening its position as one of Japan’s top online gaming businesses.
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The newly created Line Corporation will now be tasked with the development of the Line messaging service, Naver Web portals, and operation of the Japanese ISP Livedoor. Line Corp. is tasked with becoming the number one domestic media company.
NHN also has eyes on expanding its overseas business, announcing that it establish a joint-venture named Line Plus Corporation in Japan. Here’s where it gets confusing: Line Corp. will hold a 60 percent share of Line Plus Corp., while NHN’s Korean parent will hold a 40 percent share.
Mobile messaging has become a huge business in Asia, proved by the fact that Naver’s Line app hit 100 million downloads, just 18 months after launching. The company runs its own virtual currency, and expanded it to its global userbase in August 2012.
The dominance of Naver’s online services in Asia is the primary reason Yahoo decided to close its Korean business. But that hasn’t stopped Yahoo teaming up with Kakao, the Korean maker of mobile focused WhatsApp-like VoIP app Kakao Talk, to take on Line.
The two companies will work together to promote and market the service, which has over 65 million global users in Japan.
With Line, Naver and Livedoor now free from NHN’s gaming business, its parent hopes that it will make it more flexible, increasing its competitiveness both locally and in global markets.