Naver restructures its webtoon empire for expansion

Naver has reorganized its corporate structure to designate its U.S. subsidiary as the main unit for its webtoon business, with an aim of driving overseas expansion to better capitalize on the growing user base for web-based comics.

The internet company announced on Thursday that Webtoon Entertainment, a Los Angeles-based entertainment subsidiary of Naver, will act as the head office for the digital comics segment to ultimately control Naver Webtoon, a wholly-owned subsidiary in Korea, and Line Digital Frontier, a Japan-based subsidiary of Line Manga.

In the first step of the reorganization, the U.S. subsidiary bought a 70 percent stake in Line Digital Frontier from Line Corporation for 232.2 billion won ($187.4 million) and issued new shares to Line as a part of the deal. As the result, Webtoon Entertainment is 66.6 percent owned by Naver and 33.4 percent by Line, the Tokyo-listed company 72.5 percent owned by Naver.

With the new status, Webtoon Entertainment will spearhead expansion into Latin America and Europe and foster partnerships with multinational entertainment players for licensing its intellectual properties.

“Naver’s webtoon will find its way into the markets beyond Asia and North America and into Europe and Latin America by appointing the U.S. as a strategic base,” the company said in a statement. “Webtoon’s IP will also cement its position as an original content, which allows for a long-term growth,” it said.

A spokesperson at Naver said that there will be a series of follow-up internal financial deals among affiliates in completing the new corporate structure.

The move comes as Naver’s webtoons gain momentum in terms of user numbers and subscribers both at home and abroad.

Its webtoon service has more than 60 million monthly active users (MAUs) worldwide as of the end of last year, with 10 million coming from the North America region.

According to online application tracker App Annie, Line Webtoon, a webtoon platform run by Naver, ranked No. 1 in total sales of non-game apps and had the most MAUs among manga apps on Google Play and the App Store in Japan last year.

Released last December in France, Line Webtoon ranked No. 1 in Google Play’s comics category.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]