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Posted by Thomas Husson on July 16, 2014
According to Reuters, Japanese messaging app Line has filed for an IPO valued at over $10 billion.
No doubt the space is heating up. Competition is increasing. Facebook acquired WhatsApp for $19 billion. Japanese Internet giant Rakuten purchased Viber for $900 million. More recently, Kakao Corp (the maker of KakaoTalk, South Korea’s top messaging service and a direct competitor to Line) and Daum (one of South Korea’s largest Internet portals) announced they would merge through an equity swap, creating a company with about $2.9 billion market capitalization!
To put all this activity in perspective, I recently published a new piece of research explaining how messaging apps are morphing into new media portals and are becoming the new face of social.
WeChat is jockeying to become a global digital platform, thanks to the deep pockets of its parent company, the Chinese Internet giant Tencent. The other Chinese Internet giant, Alibaba, which recently invested $280 million in Tango, could also connect the dots between its commerce, payment, media, and social capabilities.
Soon to have 500 million registered online users, Line is definitely a key player in the space. The money to be raised will help in developing the already significant international expansion and further develop the positioning of Line as a “smartphone life platform.” The majority of the $335 million in revenue generated in 2013 came from games and about 20% from stickers — “emoticons on steroids,” as my colleague Julie Ask called them.
Another 20% came from marketers investing in branded accounts and sponsored stickers. While it is still early days, there is a growing potential for marketers to invest in such platforms since they offer massive reach and new tools to engage consumers. For example, Line has more than 20 million users in Indonesia and more than 16 million users in Spain.
I just published a short report on “Best Practices For Engaging Consumers Via Messaging Apps.” You can download it here.