Naver, South Korea's largest Internet company, said on Wednesday that its subsidiary, Line, could sell its shares in an initial public offering in both Japan and the U.S.
The statement was made in regulatory filing after earlier media reports that said that Line had submitted an IPO application to the Tokyo Stock Exchange. Naver confirmed the report but added the IPO decision was not final.
Naver owns South Korea's most-visited online search portal but is little known abroad. It reversed its fading fortunes with Line. As the messaging app became a household name in many Asian countries, its revenues from sales of big emoticons known as stickers surged. It has diversified its revenue by courting advertisers and offering games.
The move highlights the growth of Asian mobile messaging apps, driven in large part by the popularity of smartphones and connecting to the Internet through mobile devices.
The number of monthly average users at Line is growing faster than that of Facebook or Twitter. As of last month, Line had more than 450 million users. It has tens of millions of users in Japan, Thailand, Indonesia and Spain. According to Lee Chang-Young, an analyst at Tongyang Securities Co, if listed, Line's market capitalization will be at least 23 trillion won ($22.2 billion). That would be the same level as the market cap of Twitter Inc.
Other mobile messaging apps have also been involved in big deals.
For Internet companies that started when PCs were the predominant gateway to the Internet, messaging apps have provided a way to expand their reach to mobile phone users.
No wonder, these apps have been a threat to longer-established Internet companies, which have responded by taking a stake in the upstart industry through acquisitions. For instance, Facebook Inc. paid $19 billion to acquire WhatsApp and Viber Media was bought by Japan's Rakuten Inc. for $900 million.