Yahoo Japan operator Z Holdings Corp. and Line Corp. reached a basic merger agreement this week that will give birth to Japan's largest internet company, even exceeding the size of e-commerce giant Rakuten Inc.
At a news conference, Kentaro Kawabe, president and CEO of Z Holdings and Line CEO Takeshi Idezawa said that through the merger they hope to create a third force capable of better competing with GAFA (Google, Apple, Facebook and Amazon.com) and Chinese online behemoths BAT (Baidu, Alibaba and Tencent). But as the global competition intensifies, it won't be easy for Japanese online firms to catch up with the overseas giants. Nonetheless, it's better late than never to challenge them, and the attempt by Japanese firms to create a bigger online platform is good news for Japan, which lags far behind other countries in this area.
Yahoo and Line aim to complete the merger by the end of 2020. Yahoo's strength is its strong search engine and online shopping services, while Line's message app has a huge number of active users in Japan and other Asian countries, such as Taiwan, Thailand and Indonesia. If they can utilize their complementary strengths to counter their rivals overseas, their chance of surviving in the rapidly changing global market will improve.