Yahoo Japan, which is owned by softbank, confirmed that it is in merger talks with Line Corp, which would create a combined company with a market value of $27 billion, foreign media said. It would be a major shake-up in the tech industry, where yahoo Japan is one of the country's top Internet companies.


Yahoo Japan, which changed its name to Z Holdings last month, said on November 14 that discussions with Line were ongoing but no decision had been made. Softbank, which owns nearly half of Z Holdings, also acknowledged the talks.


Z Holdings shares rose 14.8 percent to close Nov. 13 with a market value of about $17 billion, the report said.


Line has a market capitalization of about $10 billion.


Sources told Reuters a few days ago that a decision could be made by the end of the month, with softbank and Line parent Naver Corp likely funding a 50-50 joint venture to take control of Z Holdings to run Line and yahoo.


Line said in a statement that it is considering improving its enterprise value, but no decision has been made.

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"Masayoshi son, chairman and President of softbank group, is trying to build an 'alibaba' in Japan with yahoo (Z Holdings) as the core," said a senior softbank executive. China's alibaba is considered the biggest success story of Mr Son's years of investment. Alibaba USES the settlement service as an entry point to direct users to all services closely related to Chinese people's lives, such as e-commerce. Become the overwhelming platform provider in China.


Alibaba's actions undoubtedly touched Mr Son, the report said. Z Holdings decided in September to buy ZOZO, which operates clothing e-commerce site ZOZOTOWN. With the merger with Line, a presence in Japan's domestic Internet market will grow rapidly. It will have amazon Japan and rakuten's weak chat apps, which lead the Japanese e-commerce business, and will be able to beef up billing services in growth areas.


Line's chat app has about 80 million users, while yahoo Japan's service has about 50 million. The merger, if successful, would create a 100-million-person service platform that is both financial and retail.


On the one hand, though, even with the help of the two companies to build a platform in Japan's domestic market, the report notes, the large IT companies in China and the us are still overwhelmingly large in terms of research and development costs, among other things. In order to gain an advantage in the competition, the investment of technology and experience obtained through the AI investment promoted by softbank group is indispensable.