Line services/Courtesy of Naver

Line in merger talks with Yahoo Japan

Two major high-tech corporations of Korea and Japan are poised to join hands so as to challenge such global players as Amazon in the United States and China’s Tencent.

Line, the biggest instant messaging application in Japan with up to 80 million users, recently confirmed that it is in merger talks with Yahoo Japan, the country’s primary web portal with about 50 million users.

Korea’s dominant web portal Naver owns Line while Japanese telecom operator SoftBank controls Yahoo Japan.

SoftBank Chairman Masayoshi Son reportedly offered the $27 billion union to Naver founder Lee Hae-jin. The two met in September to discuss the mega-sized contract, according to reports.

Earlier this week, Japanese media outlets reported the prospective deal, which will create a mega-sized internet payment platform with more than 100 million users.

Both Line and Yahoo Japan confirmed that discussions were underway although they claimed that nothing had been decided yet.

SoftBank suffered a big loss during the third quarter of this year, its first quarterly deficit in 14 years, because of the struggling Vision Fund, which invested in many promising start-ups.

Observers point out that SoftBank would try to make a turnaround by advancing into the e-commerce and online payment businesses.

From the perspective of Naver, the company needs to find a new cash cow.

Reports have it that SoftBank and Naver will form a joint venture, which will control a holding company to run Line and Yahoo Japan.

It remains to be seen whether the discussions will eventually lead to a real deal, which will change the landscape of online businesses not only in Japan but also in the world.

Hillary Lee studied literature in Seoul. Lee has big interests on various topics including IT, BT, business and finance. Lee can be reached at or 82-2-6956-6698.