Line, the popular messaging app in Asia, is about to face its biggest challenge yet as mobile messenger provider, Kakao, merges with Daum Communications. The merger is worth $3.3 billion, and is the largest merger for any local Internet-based company in South Korea to date.
Daum's biggest rival is Naver, the company behind Line. From what we understand, Line has around 450 million registered users, compared with Kakao's 145 million registered users. These numbers are not as impressive as WhatsApp's nearly 1 billion registered users, but it should be enough to help Daum compete with Naver.
"We've decided on the merger to maximize our competence in the fast-changing global market environment," said the new company in a statement.
The merger will allow Daum to expand and also provide much needed resources to Kakao. If everything goes to plan, Line is up for some serious competition from Kakao for the first time.
For those unaware, Kakao is not just a mobile messenger app, but also a portal for playing mobile games. This is Kakao's biggest consumer appeal after the company reported that registered users combined downloaded over 400 million games in July. That's a lot, and we're guessing if more focus is placed in the gaming department, Kakao could one day rival WhatsApp for the mobile messenger throne.
Line and WhatsApp are not the only messenger apps Daum and Kakao will have to keep an eye on. WeChat, a messenger app owned by China's TenCent, has over 355 million users, which is more than double the amount of registered users under Kakao's belt. Strangely enough, TenCent is a shareholder in Kakao, which makes for a very off relationship.
Don't be too surprised if TenCent is forced to sell all its shares in Kakao due to conflict of interest.
As it stands right now, though, the new company has a lot of work and hardships ahead. Going up against Line will not be easy, but the combined strength and experiences from both companies should make the going easier than before.
