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Naver bets on SoftBank's e-book company to reclaim lead in Japan

Naver to boost its presence in Japan's content scene by joining forces with SoftBank

By Oct 05, 2021 (Gmt+09:00)

Naver bets on SoftBank's e-book company to reclaim lead in Japan 

South Korea’s major portal operator Naver Corp. is looking to firm up its partnership with SoftBank Group Corp. and increase its presence in Japan's e-book scene by investing up to 171.6 billion won ($144.5 million) in eBOOK Initiative Japan Co., a Japanese e-book platform.

According to the IT industry on Oct. 4, Naver’s third-tier subsidiary LINE Digital Frontier Co. announced plans to acquire shares in eBOOK Initiative Japan, currently listed on the Tokyo Stock Exchange. 

Founded in 2000, eBOOK Initiative Japan is a subsidiary of SoftBank Group. Last year, the e-book company logged revenue of around 29.9 billion yen ($270 million) and an operating profit of around 957 million yen. Its biggest shareholder is SoftBank’s subsidiary Yahoo Japan Corp., which holds a 43.4% stake.

Once the share purchase wraps up in the first half of 2022, industry watchers expect eBOOK Initiative Japan to be delisted and become a subsidiary of LINE Digital Frontier, which operates LINE Manga, a Japan-based webtoon service. 

Naver has been looking for ways to reclaim its leading position in Japan since LINE Manga, which had dominated the webtoon scene in Japan, was overtaken by rival Kakao Corp.’s webtoon platform, Piccoma.

To boost LINE Manga's competitiveness, Naver has been focusing on creating original content that is suitable for online platforms instead of sticking to the existing strategy that involves converting Japanese comic books into digital content for distribution.

By investing in eBOOK Initiative Japan, the Korean portal operator aims to shore up its presence in Japan's e-book market, which has experienced steep growth alongside webtoons’ increased popularity.

In 2020, the Japanese e-book market size surpassed 3 trillion won ($2.5 billion), according to the Japan Book Publishers Association. 

Naver's investment into the Japanese e-book platform is also geared at strengthening its ties with SoftBank. Last year, Naver’s Japan-based subsidiary LINE Corp. and Yahoo Japan set up a joint venture, A Holdings, to maximize their business synergy in overlapping areas such as fintech and e-commerce.

Moving forward, Naver and SoftBank plan to put LINE Digital Frontier at the forefront of their webtoon and e-book businesses in Japan.

Also, LINE and Yahoo Japan will revamp their payment services, LINE Pay and PayPay, to make them available on both platforms’ affiliated stores. Naver’s shopping platform, Smart Store, will also be accessible on Yahoo Japan.

Write to Joo-wan Kim at kjwan@hankyung.com

Danbee Lee edited this article.

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