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| Naver founder Lee Hae-jin speaks at the company's data center "Gak" in Chuncheon, Gangwon Province, in July last year. / Courtesy of Naver |
By Kim Jae-heun
Naver founder Lee Hae-jin has been appointed as chairman of A Holdings, a joint venture established between Korean company Naver and Japanese conglomerate SoftBank to compete with American and Chinese rivals including Google, Alibaba and Amazon.
Line is the most-used mobile messenger application in Japan and is operated by Line Corporation. Yahoo Japan is the biggest portal website in the country and is owned by SoftBank. After the merger, A Holdings is expected to have 130 million monthly average users in Japan.
The two companies each invested 50 percent to split ownership of the joint venture's shares equally.
Lee has made his vision for A Holdings clear with a focus on an artificial intelligence (AI) and online business.
Last November, Line and Yahoo Japan announced that they would become a global leader in AI technology when they join forces.
Naver CEO Han Seong-sook said during a conference call last month that she cannot give detailed information but the company will collaborate with A Holdings in some of its major business areas such as online payment systems, banking and search engine development.
Naver is the global mother company of Line Corporation that was founded in June 2011.
The most visible result from A Holdings is expected in the e-commerce and fintech fields combined.
Lee has been emphasizing the company's efforts to beef up its AI power to the level of Alibaba, Tencent and Baidu.
In order to do this, A Holdings needs massive data and this requires the company to focus on e-commerce.
Last September, Yahoo Japan spent 4.2 trillion won to acquire Zozotown ― one of the top three online fashion retailers. A Holdings is expected to own the largest market share in the Japanese e-commerce sector combining Line Shopping, Yahoo Auction and Zozotown.
The joint venture will allow the company to bring use those platforms' online payment systems in Korea. Both Yahoo Japan and Line operate their own e-payment services in Japan and the two have been in a price dumping war. After combining Yahoo Japan and Line, they hold 60 percent of the online payment market.
A Holdings is likely to make significant investments in the AI sector too.
When Yahoo Japan and Line announced their management integration last year, Line CEO Idezawa Takeshi said Line and SoftBank are no match for global IT firms in terms of market capitalization and human resources.
"Line and Yahoo Japan will target the global AI market including those of Japan and Southeast Asian countries with a strategy that we are going to put together everything from data, money and talent," Idezawa said.
A Holdings has already revealed that it will put 1.7 trillion won into AI annually but this is not a large investment compared to what Google, Alibaba and Amazon are spending.
Google spent 15 trillion won in the AI sector last year, and Alibaba spent 7 trillion won.
Meanwhile, A Holdings tapped four directors for its board including Lee, Line Corporation's Chief Finance Officer (CFO) Hwang In-joon, SoftBank CEO Ken Miyauchi and CFO Kazuhiko Fujihara. One more official from SoftBank will be appointed as a director under the approval of Naver and SoftBank.
