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Business deals

How Yahoo Japan and Line dominate online life in Japan

More than 80% of Japanese netizens chat on Line, and 50% read Yahoo! News

The new company -- a merger between Yahoo Japan and Line -- will have a combined user base totaling 100 million people, becoming the dominant mobile payment service provider in Japan.

TOKYO -- For a large swathe of the Japanese population, Yahoo Japan and Line meet most their internet and social media needs. Messaging app Line is used by 81% of internet users in Japan, according to ICT Research and Consulting. The Yahoo! News portal is read by more than 50% of internet users on a weekly basis, according to Digital News Report released by Reuters Institute.

Yahoo Japan was established as a joint venture between its U.S. parent and Japanese mobile network provider SoftBank in 1996. Its main source of revenue is derived from the Yahoo Japan portal and its subsidiaries include travel website operator Ikyu and online bank Japan Net Bank.

Yahoo Japan became a holding company under the name of Z Holdings in October 2019. However, it still pays royalties to U.S. Yahoo owner Verizon. For the most part, its operation is confined to domestic businesses.

It recorded consolidated sales of 954.7 billion yen ($8.78 billion) in the fiscal year ended March 2019. At the end of that year, it employed 6,515 people.

Line was founded as a unit of South Korean online platform Naver in 2000. Line is Japan's most popular messaging app, with more than 80 million monthly active users. It was launched in 2011 after a massive earthquake and tsunami devastated parts of Japan and people faced difficulties to check on loved ones.

Its other businesses include banking and financial services. It set up a brokerage with Nomura Holdings in 2018. It posted consolidated sales of 207.1 billion yen in the fiscal year ended December 2018. At the end of April 2019, it had 2,269 employees.

Line took a 33.9 billion yen net loss in the three quarters between January and September. To compete with other internet majors, it made heavy investments including in promoting its payment service.

While Z Holdings' operation is generally confined to Japan, Line is popular in some overseas markets such as Thailand, Taiwan and Indonesia. Thailand is Line's stronghold in Southeast Asia with 45 million monthly active users in the third quarter of 2019 in a country of 70 million people.

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