Line Targets 1BN Users Of Its Messaging App By 2015

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The ripples from Facebook’s $19BN purchase of messaging app WhatsApp continue to rock the app space, pushing more and more developers to build comms tools with a twist in the hopes of harvesting even a fraction of the traction and engagement that veteran player enjoyed. (Ultimately the size of the WhatsApp exit is the massive carrot here — while Viber’s recent sale to Rakuten for $900M provides another lucrative example to concentrate developers’ minds.)

But newbies are just the small fry. Japan’s Line, which launched its messaging play in 2011 in the wake of the earthquake and tsunami that crippled the country’s phone service, is already a substantial messaging player (and a company in its own right, having been spun out of its parent company, NHN Japan Corp) — another would-be WhatsApp in the making.

Speaking at a conference in Tokyo today, Line’s CEO said it’s now gunning to have one billion users by 2015 (via Bloomberg). Line has previously said it expects to have signed up half a billion users this year. As of the start of this month it reported 400 million users. While, back in February it claimed to have added 2M users in 24-hours following an extended WhatsApp outage — a spot of opportunistic schadenfreude.

It’s worth flagging up that none of Line’s figures refers to active users. It reports user registrations only — and has never broken out official figures for active users. So there is a continuing question-mark about the scale of engagement on Line’s platform — especially how engaged users are outside its home market of Japan — and also the cost of user-acquisition for the business, which has deployed high profile TV ad campaigns in some of its markets to help drive sign-ups.

Still, Viber did not break out active user stats either, yet went on to manage a substantial exit. Line’s future seems more likely to be autonomous with the company reportedly considering whether to pursue an IPO in the middle of this year. Which gives Line an incentive to plump up its headline user-number, ahead of any filing.

Whatever Line’s MAUs, the social messaging and entertainment platform is already bringing in substantial revenues from its user-base. In Q3 last year Line reported nearly $100 million in revenue from games-related purchases, followed by sticker sales (its two primary revenue streams). Line’s apparent ability to monetize a free comms platform — using its walled garden as a marketplace for selling other stuff — gives developers another incentive to get building the next big messaging app. Scale it, and then you can sell it (or sell stuff on it), runs the logic. 

So the cycle continues, especially as further growth is predicted for messaging apps as they hit a mainstream inflection point, and head for mass adoption this year. Even with Facebook betting so big on the space, messaging still offers the promise of more momentum.