Naver readied a third run at Japan's search market, this time with LINE

Naver is Korea's No. 1 portal, built on search.

Unifying search and AI into one unit and riding LINE's 16.7 million Japanese users — plus Yahoo Japan merger know-how — can finally win share where Google holds 70%.

Naver established a Japanese subsidiary in 2000 to run its portal there, but shut the service in January 2005, unable to gain share against Yahoo Japan and Google. It tried again in 2007 and pulled out at the end of 2013.

In 2018 Naver announced a third entry, merging its search R&D unit with its AI unit into 'Search & Clova' as a base for taking search overseas. Its Japan-focused search engineering team grew eightfold versus the last attempt, and it runs joint research with Naver Labs Europe, the largest industrial AI research center in France. The bigger change is distribution: Naver's subsidiary LINE — which became Japan's top messenger after being seen as reliable during the 2011 earthquake — merged with Yahoo Japan under holding company A Holdings, to be led by Naver founder Lee Hae-jin.

Naver's two earlier Japan entries failed for lack of share against entrenched incumbents — the 2018 restart unified search and AI into one overseas-facing unit.

The LINE-Yahoo Japan merger changed the distribution math: Naver's own subsidiary now operates Japan's top messaging platform with 16.7M monthly users.

Search engineering capacity for Japan grew eightfold since the last attempt, backed by joint research with Naver Labs Europe in France.

Third attempts land when distribution changes, not the technology: Naver's earlier failures predate it owning Japan's top messenger — this time its search rides LINE's installed base.

As of December 22, 2020, the third attempt was still preparation rather than product. Kim Sang-beom, head of Naver's Search CIC, told DEVIEW 2020 on November 25: 'We believe we will certainly be able to succeed this time.' The Line-Yahoo venture under A Holdings aims to compete with Google, Facebook and Tencent across AI, commerce, fintech and advertising, and Naver cites the merger as a chance to absorb know-how in Japan's search sector. The market reality: Google held about 70% of Japanese search and Yahoo Japan about 20%.