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Naver vs Kakao: Intense rivalry to extend beyond Asia

By May 11, 2021 (Gmt+09:00)

Naver vs Kakao: Intense rivalry to extend beyond Asia

South Korea's two online giants Naver Corp. and Kakao Corp. have completed their respective acquisitions of storytelling platforms in the US and Canada, heralding head-to-head competition in the world's largest media and entertainment market. 

Naver has closed its 684.8 billion won ($612 million) purchase of a 100% stake in Wattpad, the world's largest web novel platform based in Toronto, it said in a regulatory filing on May 10. It slightly revised up the price of its largest-ever cross-border acquisition.

On Tuesday, Kakao Entertainment Co., majority-owned by the mobile messaging app operator Kakao Corp., said that its board of directors has approved its acquisitions of both US-based mobile fiction startup Radish Fiction Inc. and the third-largest US digital comics platform Tapas Media Inc. 

Under the transactions, Kakao has increased its stake in Radish Fiction to 66.4% for $160.6 million from 12%, while securing a 60.5% stake in Tapas Media for $93.3 billion. 

The two companies' acquisitions of the web content platforms in North America highlight their heated race to bolster their storytelling intellectual property (IP) portfolios not only at home but abroad.

"A combination of Wattpad's infinite content with Naver Webtoon's elaborate technologies and various paid service models will create great synergy," said Kim Joon-ku, Naver Webtoon's chief executive.

Naver will apply its webtoon platform's paid preview services, advertisements and IP business to Wattpad, he added.

For its part, Kakao Entertainment said in two regulatory filings that the acquisitions of both Radish Fiction and Tapas Media were aimed at securing a springboard for its foray into English-speaking countries. It will close both transactions by the end of June.

"In collaboration with Kakao Entertainment, we will expand Radish's original content into movies, dramas and other entertainment segments," Kakao quoted Radish co-founder and CEO Seung Yoon Lee as saying.  


At home, Naver and Kakao are competing to acquire Munpia Inc., their smaller domestic rival in the web novel market.

Munpia is the country's No. 3 web-based novel platform after Naver and Kakao, with an estimated enterprise value exceeding 300 billion won. Its average monthly page views top 100 million with around 400,000 visitors a month and 47,000 writers registered on its platform.
Naver vs Kakao: Intense rivalry to extend beyond Asia
Its acquisition will further strengthen the buyer's IP portfolio, a future growth pillar for both Naver and Kakao. If Kakao clinches the deal, it will narrow its gap with Naver and threaten to overtake the latter in the home market. In Japan, Kakao 's webtoon app Piccoma caught up with Naver's Japan-based manga service for the first time last year.

Web novels can be adapted into various types of media including webtoons, TV series, movies and games. Korean webtoon-based dramas and films, including Sweet Home and Space Sweeper, have topped the charts on over-the-top (OTT) streaming services providers, led by Netflix.

Kakao has posted accumulated revenue of 40 billion won from the webtoon version of its web novel, I Alone Level-up, with a cumulative 620 million downloads.

The world's OTT market is projected to expand to 73 trillion won next year from 58 trillion won in 2020, according to global consultancy PwC.

Write to Min-ki Koo and Chae-yeon Kim at

Yeonhee Kim edited this article.
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