Messaging apps are all the rage these days with the acquisitions of WhatsApp and Viber. Now Line has buyers circling. The popular messaging app claims 360 million users worldwide, with most of them in East Asia. Softbank is said to be in running to acquire some or all of the messaging app, but South Korea’s Naver Corporation, the company behind the app, is denying the reports.
Line is a bit different from the two messaging companies purchased in recent weeks. Viber is Skype-esque, while WhatsApp is at its heart, a SMS service. Line offers the messaging service, but it also derives revenues from in-app purchases and games. It’s 2013 revenues were the highest for a non-game app for both the Apple and Google app stores. It raked in $335 million, and Q4 revenue stood at $120 million, up 550% from the previous year. A buyout target with revenue. There’s a switch.
Whereas WhatsApp prides itself on being uncluttered, Line is crammed full of stuff for users to buy – ranging from stickers to games to play with friends. Half of its revenues come from the in-app games, so from a monetization standpoint, the company is on the right trajectory.
The pushback on the Softbank rumor is to be expected at this point. They see the massive jump from Viber’s purchase price of $900 million on February 14 to WhatsApp $19 billion last week. Messaging apps are in demand at this point, and the company can choose its suitor. It can also bid up the price with the revenue growth.
Line has also been rumored to be thinking about an IPO, so the denial of the Softbank rumor could be tied to that. A spokesperson told Reuters, “there’s no reason to sell a stake and no plan to sell.” At least until the price is right.